FTB needing a mortgage

Dreaming_Sheep

Hi All,

So having had a week wasted and being shafted up the rear end by HSBC (refusing us based on our credit, despite stricter affordablity checks indicating that there would be no problems), my partner and I are looking for advice on where to go next to get a mortgage, with minimal to no risk of being refused.

We've had an offer agreed at £167,000 and need a mortgage for £150,00 (so 90%), our joint income is currently £54,741. We're 26 & 27 so can take out a longer term morgage if it helps.

The down side... I have £4,600 outstanding on Credit Cards and my other half has a £8,000 loan, plus £3,000 on a credit card. We also have one credit agreement at approx £900 outstanding, which we pay £45 a month on, interest free.

All the affordablity checks we've done have been on higher lending and including things like my Pension outgoings and mobile phone bills and have given a guidance of over £160,000, being reserved.

It probably doesn't change anything, but we've been paying £750 rent on the flat we're currently in, without any problems and have been reducing our debt during this time, not sure if that can in some way be taken into consideration.

Any advice would be appreciated as we're after a quick sale and have now been delayed a week by terrible advice from HSBC.

Thanks in advance,

Dreaming Sheep

DannyboyMidlands

I think that you are being a bit hard on HSBC. Between you you earn £54k yet have debts of £16k which suggests that you can't afford your lifestyle.

Why not just pay off the debts, cut your outgoings and save another deposit?

The_Palmist

It will be a hit and miss with other lenders. Have to agree with above poster, reduce debt first. Can you rent somewhere cheaper for the time being ?

There many disadvantages of buying a house vs renting so you shouldn't think that you must buy !

Dreaming_Sheep

Thanks for the replies..

I may have seemed harsh to HSBC, but they were aware of all of the details during the 2 hour discussion we had with them, disecting our lives getting ready to cross-sell all their insurnace too. If during that meeting she had turned to us and just said, it looks very unlikely that we would offer you a mortgage and to look elsewhere, we would have done that and saved ourselves a (now negative) credit check and week of waiting. Instead, all the feedback we got from the advisor was positive (in terms of what we were after being feasible).

We went back into her office and her first bit of advice was to reduce the debt to £7000 total. Why couldn't she say that in the first place and saved us the hassle.

While I agree our debt looks bad, it was built up during an earlier relationship (the other half's loan is the cause of an ex's 'habits') and from a time where I was earning a lot less money. It is gradually being reduced, but we're paying rent that is almost the same as what our mortgage would be and we pay all our own bills too. Not much different really, the only addition monthly outgoings would be Buildings insurance and the responsibiliy of anything going wrong in the house, if it does.

Back to the original question, any ideas if there's anywhere we're more likely to have success?

kingstreet

Whole market or independent broker.

Otherwise you run the risk of traipsing up and down the High Street trampling all over your credit file.

Dreaming_Sheep

Thanks kingstreet. We're trying to book another meeting with one. We spoke to a Whole of Market advisor before going to HSBC and they said pretty much the exact same thing, but could not cover HSBC.

Honestly, what do you think our chances are?

kingstreet

Dreaming_Sheep wrote: »

Thanks kingstreet. We're trying to book another meeting with one. We spoke to a Whole of Market advisor before going to HSBC and they said pretty much the exact same thing, but could not cover HSBC.

Honestly, what do you think our chances are?

Hopefully you're now aware of the kind of cherry-picking going on at the top of the market.

Unless you are 100% fitting their profile, you will simply not be offered a mortgage.

The broker should be able to match you with the best deal for your circumstances. That's not necessarily the best deal in the market. My first instinct when I get a new client is to look at one of the major player's affordability calculators - Halifax or Abbey. I then have a good idea if I can do it and get you the amount you need.

I've run the Halifax calculator and the maximum you can borrow is;-

A/B pass - £212k
C pass - £185k.

I've assumed a 90% LTV, 25 year term, that the £8k loan costs £200pm and that you have no dependents.

I'd now be reasonably confident of getting you the mortgage for the amount you need. Then it's a case of finding the lender and deal which best suits your circumstances.

Dreaming_Sheep

WoW, THANK YOU! Although this is where I am now worried. Does the above take into account the Credit Card amounts too?

And you're pretty spot on with the loan, it's £212, we have no dependents and have been looking at 30 year terms, giving a lower monthly expendature, keeping it more affordable (not sure if this really affects anything).

What does the A/B & C pass refer to? Although we're looking at £150k, so if it's a A/B being better and we only get a C, in theory we're still within their range.

kingstreet

Dreaming_Sheep wrote: »

WoW, THANK YOU! Although this is where I am now worried. Does the above take into account the Credit Card amounts too?

And you're pretty spot on with the loan, it's £212, we have no dependents and have been looking at 30 year terms, giving a lower monthly expendature, keeping it more affordable (not sure if this really affects anything).

What does the A/B & C pass refer to? Although we're looking at £150k, so if it's a A/B being better and we only get a C, in theory we're still within their range.

The Halifax credit system grades you. So if you get a C and you can still borrow enough, you know you're ok. At lower LTVs the pass grade means they ask for less up front documentation.

You put the monthly costs in for the fixed payment credit and put the credit card balances in separately. I entered the two fixed payments and the two card balances. A longer term would increase the amount you could borrow.

kingstreet

Loan £212 per month, 30 year term, C pass = £196k.

Dreaming_Sheep

Legend! Thanks for the info!