Opinion on our chance of a mortgage?...

leannie_2

Situation -
Me - good job which I have been in for 3 years, stable in a local authority, pay of £21k which goes up by £1500 - £2000 each year, I am at the bottom of the payscale so have 10 rungs of the ladder before running out of increments.
I have £4000 cc debt, which I am paying off and for the past 2 - 3 year have been really good with my finances, but as a student and recent graduate, I was useless and my credit rating has suffered because of it. I have no CCJs but had a default for £30 about 3 years ago, from a mistake with a mail order company plus a lot of late payments.
My OH, has been in his job for 3 years, only on £12k per year but this will increase to £15k later this year, he has been helping to build up the company. He has a two store cards with a joint balance of £1k, but has a good credit rating.
We have moved about quite a bit, as graduates getting new jobs and stuff. But have settled here for the past 3 and half years.
We have rented houses for 6 years, never missing a payment, currently paying £700 per month.
We have seen a house we want to offer on, but will need to offer £150k, and require a 100% mortgage...do we stand a chance?
(I know we should try to save a deposit, pay off our cards etc, and we have been doing, so far paying off both our graduate loans early, I have payed off one credit card completely, and both of us have paid off our overdrafts, and it feels like we will never get a chance if we wait until we have paid off everything and managed to save a deposit)

leannie_2

Is the chance that bad?

SE9Gull

Leannie

Some good and bad news here.

Check out Scottish Widows - they offer special deals for graduates, my wife and myself have a 100% deal with them and I did not have a blemish-free credit history.

I think the difficulty you have will be on your respective incomes - what you are looking to borrow is over 4 times your combined salaries.

Depending on your location, as a local authority employee you might be eligible for the key worker scheme which could provide some assistance - this webpage explains it more - http://www.communities.gov.uk/index.asp?id=1151221

I'm sure a wiser head will reply with some more creative options in the morning.

MortgageMamma

Hi Leannie

It should be doable but whether its affordable is something else. There is one lender who may stretch to 5 x joint one a 100% mortgage but they base how much they will let you borrow on your credit score, so, without having you credit checked I really could not say if they would do this for you or not. The lender also does not take into account cc debts, just loans.

If you have been good with your credit in the past three years since the default, and especially in the last 12 months I can see no reason why they would reject you. As you are first time buyers, have moved about a lot ad want to borrow quite a high amount in relation to your salary I would advise you to take the advice of a broker, at least then you will know EXACTLY how much you can borrow before you go looking at houses.

leannie_2

Thanks Mortgage Mamma, we have spoken with a broker previously who advised us that they thought we could get a mortgage for £150k, I showed her my credit rating and report from Experian, but this was in October, and they have now changed, selling their own mortgages not a range of providers, and the mortgage that was suggested was an offer through them with a scottish bank with a connection to the monarchy.
I know it is not much in the grand scheme of things, but we should both have pay rises of £2k each in April, so that extra £4k may help a little bit.
I am hoping to talk to a couple of brokers tomorrow, and see what they say and we'll not make an offer unless we have a positive response from them.

talksalot81

It seems to me that there is a very strong chance that someone would lend you this amount. However there is more to it than that and you really should do thorough calculations to ensure that you really can cope with the debt - the bank is happy to lend me more than I can afford to repay, so make sure the same is not true for you (so you need to think about it quite hard!).

MortgageMamma

Hi Leannie

So you've been into Bradford and Bingley and they've told you if you go to royal bank of scotland they will lend you 150K? RBS are one of the more generous lenders on the income multiple/affordability side of things, and they sometimes offer good products. The admin leaves a lot to be desired at times. However they are flexible on having a little bit of adverse - their critieria is no more than three "bad events" in the last three years. By this they mean ccjs etc.

They may not be the right lender for you, nor the cheapest. so you are right to reapproach some brokers. Do yourself a big favour though. tell them under no circumstances must they credit check you at this stage as it will leave footprints on your credit file which will influence other lenders decisions to lend to you and also lower your overall credit score. If you have an up to date copy of your credit report to give them that would be must better,

MM

leannie_2

MortgageMamma wrote:

Hi Leannie

So you've been into Bradford and Bingley and they've told you if you go to royal bank of scotland they will lend you 150K? RBS are one of the more generous lenders on the income multiple/affordability side of things, and they sometimes offer good products. The admin leaves a lot to be desired at times. However they are flexible on having a little bit of adverse - their critieria is no more than three "bad events" in the last three years. By this they mean ccjs etc.

They may not be the right lender for you, nor the cheapest. so you are right to reapproach some brokers. Do yourself a big favour though. tell them under no circumstances must they credit check you at this stage as it will leave footprints on your credit file which will influence other lenders decisions to lend to you and also lower your overall credit score. If you have an up to date copy of your credit report to give them that would be must better,

MM

Hiya, Yep got it in one! I wasn't sure how much we could mention the actual institutions.
I am with Experian credit expert so can print out an up to date credit report for brokers, which is what I am planning on doing. I am kind of hoping that maybe B&B might have something that they can offer us from their own range, as the lady was great, we went to another in an EAs and they were horrid and bullying.
The other whole market broker we have contacted was recommended by a friend, but her fees are expensive, we have also been told to contact L&C, but at the minute I would prefer to use someone I can meet face to face, what with being a FTB.
Were RBS the company who you thought of initially? I understand you are unable to give advice on here, but it would be useful to know if they sprung to mind.

MortgageMamma

Hi Leannie

First of all, don't arrange a mortgage with someone just because they are helpful and nice. You could end up paying well over the odds for the privildege of speaking to this nice person.

Avoid the estate agent broker who bullied you, you don't need that. Normally estate agent brokers are not truly whole of market, but work from a panel which they refer to as representing the whole of market (sometimes as few as 10 lenders) - so estate agent brokers arnt the best people to approach. They are usually quite inexperienced as well and use the estate agents as a training ground. They are also highly targetted as they are generally employees as opposed to a self employed broker who dances to their own tune.

The broker who charges fee's - why pay the fee's? would she be rebating the commission? Brokers get paid a commission from a lender so, there really is no need to pay upfront fee's unless you will get some back on completion. Also, you can try and negotiate fee's - whats the worst she can say? No? If you do choose to use her, make an arrangement not to pay a fee until you get your mortgage offer - that way if she messes it up then you wont be handing over your cash for nothing.

I'm afraid London and Country would not advise you at this stage, their business model does not allow it, as they only deal with people who have actually secured a property to buy - which doesnt really help young FTB#s such as yourself who need to know how much they can borrow before you put offers in does it?

You are right to obtain your credit report from experian. A copy of your equifax report would be useful too as sometimes they hold completely different information - you can also get that using a free trial method for 30 days.

Yes RBS were one of the lenders I originally thought of, but to be honest they may not be the best as there's absolutely loads you could choose from. The key here is not what lender you will go to, but what broker, and so far apart from the bradford and bingley lady (which is no good for you now) you have had negative experiences.

Its ok and a good idea to shop around for brokers, you need someone who is truly whole of market i.e. access to every lender not just a panel, who does not charge fee's and most importantly who you trust and feel comfortable with. My advice to you is to keep speaking to brokers (with the don't credit check me line) until you find someone who inspires you with confidence and puts you at ease.

maryjane01

I got my 100% mortgage with RBS through a broker. I got all the information from an RBS branch while I was doing my own research, I asked for a mortgage advisor from RBS to contact me and they never did, also they had a higher lending charge.

Going through a broker I got decent service and there was no HLC. Definitely go through a broker as they often have deals not available on the high street.

leannie_2

Update -
Well, The lady from B&B couldn't get B&B to help us due to the lending ratios, but she was great and asked me if she could share our details with a friend, who was a former B&B advisor, who was now a fee free independant advisor. We agreed, and her friend called us last night and is going to have a look around for us today, and feedback to us, she said that she was based within a legal firm, who offered discounted legal fees if you got a mortgage through her, but that we should get a few quotes and compare them before deciding.
The other broker recommended by my friend also called, saying she had to charge a fee, as she is actually an Investment and Finance Planner for high net worth clients and not a mortgage broker. She has said she will reduce her fee to £300 (and keep any product commission) and will advise on our finances as a whole. She called this morning to say she had found a possible deal with Northern Rock (5 year fixed deal on a rate of 5.99% with £700 cashback on completion) and advised us to go interest only (we had said we wanted a repayment) but was going to going to look for us further today and would feedback any other possibilities later.
I had told her we had contacted the other broker, and reminded her this morning, and was told she was not in the business of being compared against other brokers and the service she offered was personal, encompassing and professional. Her opinion on fee free was that they can't offer a service like her as they have to get as many people through the door as possible to get decent commission. She mentioned how she usually deals with high net worth customers, so some comapnies would do her a deal on a mortgage like ours on the hope she would send one of her regular clients thier way.Then continued to chat away, assuming we would be using her ...eek!
I will see what the fee free lady comes up with later but I feel like a rabbit in the headlights at the minute.
(On another note, the Experian credit report seems to have all of my accounts on it, including my default from Studio catalogue for £36, I had (stupidly) thought Equifax would have not have the info, or possibly duplicate info, HSBC had made errors on my Experian report and when they were corrected, they said they didn't use Equifax ...eek!)