Thinking of buying

ravravrav

Hi, a property close by has come on the market at what I think is a decent price. There's some interest in it because I've seen people outside and it's only been on the market for a few weeks at least. I think it's a repossession.

At the moment I've got just over 10%, by the end of the year I'll have close to 15% but of course I'd like to put in an offer before the house is sold. Also, another thing I've thought about is putting it on rent, but as I'm a first time buyer I'll consider this later after buying.

Another relevant bit of info is that I've got a mobile phone and that comes out of another bank account and I've probably been £40 overdrawn for a few months. I'm pretty sure that will affect my credit rating.

Can anyone advise me on a few things:

1. What are my chances of getting a good mortgage?
2. As its a repossession would they want to sell quick as possible or hold out for a better deal?
3. How long does it take to buy a house - could it be sold in 1 month?
4. Is it better for me to think about buying only after I have enough deposit/bank accounts not overdrawn?
5. Anything else I should be aware of?

Many thanks!!!

casper_g

ravravrav wrote: »

1. What are my chances of getting a good mortgage?
2. As its a repossession would they want to sell quick as possible or hold out for a better deal?
3. How long does it take to buy a house - could it be sold in 1 month?
4. Is it better for me to think about buying only after I have enough deposit/bank accounts not overdrawn?
5. Anything else I should be aware of?

Many thanks!!!

1. Chances are relatively slim. There are 90% mortgages available, but the banks are fairly picky about who they give them to. To get one they will need to be comfortable that the house is worth what you pay for it and that you can comfortably afford the repayments. Talk to an independent mortgage broker (not the salesperson at the bank) and see what they say.
2. Repossessions are usually priced realistically to sell, and there are bargains to be had. But the banks are obliged to get the best price they can for the former owners and will not take low offers without giving notice to other potential buyers so they have an opportunity to offer more. The chance of having an offer accepted and later being outbid (perhaps after incurring legal and survey fees) is higher than usual.
3. I doubt you'll be able to complete the buying process in a month. Most purchases probably take 6-12 weeks from acceptance of an offer to completion, but this may be different for repossessions.
4. You can't buy a house until you have the deposit. There's no harm in looking around to see how much things cost and make sure your ideas are realistic, but there's no point making offers you won't be able to follow through. Regarding your overdraft, if you have sizable savings (such as you would need for a house deposit) then running a £40 overdraft seems silly, and might suggest to a bank that you're not as fully in control of your finances as you should be. Was this an arranged overdraft within the limit, or an unarranged overdraft attracting significant charges? If the former, I'd say it is unlikely to matter too much.
5. Lots of things! Have a read of this page, for a start.

ravravrav

Thanks for the answers. I think the house is priced at a good price, and I have a deposit - just not as much as I would like of course. It's more than 10% however.

I am going to blitz my overdraft so hopefully that won't count against me.

I'll read the page you advised - thanks!

hcb42

I dont think a £40 overdraft in itself is a huge issue...although by that I mean an authorised one.
And we all have mobile phones...many on contracts so wouldnt worry over that.
But deposit is lightweight, and if the overdraft needs to be blitzed....for that small amount, then just double check your affordability before you commit. Are your earnings sensible for the amount you need to borrow?

Definitely do not start putting offers in until you have a sensible deposit in and enough for all the fees....then in the 2-4 months it might take to complete the sale you can still be topping up savings for the "unexpected"

ravravrav

The amount I want to borrow is within my means ie. with salary etc. I've used the mortgage calculator on this site and I can afford to borrow that amount (including if interest rates went up to 12/13%).

I'd still like to save more money just so that my monthly instalments are less over time. By the end of the year I'll have more than 15% deposit so just wondered if there is anything I can do in the meantime to improve my chances of getting that mortgage etc.

lvm

Ask parents/family for a short term loan of the 5% that you could repay in 6 months time?

The £40 overdraft - is it unauthorised? Is this going to be a struggle to repay?

Is a mobile phone contract the only credit entry on your credit file? If not, get a credit card, use it every month and pay off in full.

Get a free trial from Experian and go through your report to check for any anomolies - you should do this before seeing an advisor.

Make sure you're on the electoral register.

Egg_custard_2

Things can often be much quicker with repos than with normal house sales. I was buying one a couple of months ago and exchange was scheduled for only 2 weeks after my offer was accepted.

From the OP, you don't sound certain if it's a repo or not. If there are pictures of the property, look for photos of the sinks. Repo properties are always vacant and the sinks have tape on them to prevent them being used.

ravravrav

Ok thanks for this - I'll check it out tomorrow.

I didn't realise the bit about getting a credit card and using it, then paying off in full. I do have credit cards but make a point not to use them - but I understand they are required to build a credit history.