First Time buyers (Again!!)

nicknkath

Hi,

Appreciate some advice. Girlfriend and I have been looking to buy our first property for around a year - have decided the time is now due to prices rocketing! Both girlfirend and I are CCJ free have a few debts (namely one loan around 6k - £120 pm) credit check from experian has stated that both have 'fair' credit rating, Is this going to hinder our mortagage application? Preliminary investigation suggests that on our joint income of approx £40K, we can borrow around 150k. Are we living in dreamland - I have heard horror stories about couple like us who have a reasonable credit rating being refused a reasonable mortage.

feedback is appreciated.

Thanks,

Kath and Nick

A_Fool_&_His_Borrowed_Mon

nicknkath wrote:

Hi,

(namely one loan around 6k - £120 pm) credit check from experian has stated that both have 'fair' credit rating, Is this going to hinder our mortagage application?

The outstanding loan will reduce your borrowing limit by the amount of the loan, I would only consider using a deposit-Mortgage, were you have at least have 5% to put down.

And i wouldnt consider buying now, as the Party's over on rocketing house price rises. Interest rates are currently gatecrashing said house price party! :eek:

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I would personally clear your debt/s and save for a deposit. I would also be wary of the housing market at this time. If you do decide to jump in look at how much your mortgage would be at 6%, 7% + really look at the different possible rates and see if its still affordable. Only you can make the decision.

I’m also a first time buyer and having lived in rented accommodation for over ten years during and since my college days. I’m desperate to move on and purchase a first property but where I live the prices are just too high. What I can just afford is terribly poor quality wise.

I also wanted to add please don’t feel pressure because of the so-called lack of housing supply and incoming immigration propaganda. The housing market is in this state due to three main culprits, terrible lending practices, and artificially low interest rates, which in turn have created rampant speculation. You can also blame the Labour government for allowing it to happen

F_T_Buyer

You're buying because prices are rocketing? Don't you mean rocketed?

I take it you missed the news about interest rate rises and the ones in the pipeline?

Buying a house because it HAS gone up in value is probably one of the worst reasons for buying, well anything!

poppy10_2

But house prices only ever go up.....

A_Fool_&_His_Borrowed_Mon

poppy10 wrote:

But house prices only ever go up.....

Ah, you clicked my signature link then! :money:

unraveller

You must ask yourself, is this really a good time to buy? Every first time buyer is struggling to 'get on the ladder' at this time, and if interest rates go up, which is very likely because of the 15 year record beating inflation rate, then your going to be in an even more precarious position.

No-one can predict the economy and anyone who says 'this' is going to happen are just guessing. Not even economists get it right, let alone estate agents and moneylenders. Please think carefully about what you could be letting yourself in for. Negative equity is a terrible position to be in. Think 90's house price crash.

Anyway, take care.

Angela_D_3

2 houses on my rightmove saved list have dropped £30k this week.
Don't blink first, you are in a good position pay off the credit cards and wait until spring in my opinion.

herbiesjp

Aside from the argument of whether now is a good time to buy or not, in response to the OPs question of whether they can get a reasonable mortgage:

Your joint income of £40k would need to be reduced by £1440 to cover the loan repayments.

However that income is still plenty to borrow the figure you quote and even more. What is important to you is the deal/rate available based on your credit rating.

Well this all depends on how you score on an actual lenders credit scoring system, however if there is nothing majorly wrong with your credit file I cannot see why you would not get standard high street rates.

Read Martin's article, and then get a copy of your credit report. Armed with that contact a whole of market mortgage adviser and see what deals they can come up with for you.

As always - just beacuse you can get a certain mortgage amount agreed, does not mean it is the right step for you. You need to budget carefully and make sure that your mortgage is affordable not only now but in the future

HTH