First time buyer: No deposit - Possible?

Pressleyno1

Hi all,

I'm currently renting, and have been for last 3/4 years. I can afford the rent no problem and it has always been paid without delay.

I am getting a bit fed up of renting, I want to get on the property ladder. I'm 27 next year, I have a decent job, and want to buy a property and make a start on having a mortgage.

At present I am paid £27,500 pa, I however have no deposit. My savings stretch to £3000 in a 3 year bond, and £700 in an ISA.

My credit probably isn't great, I've been in unauthorised overdrafts, I've had debt collecting agencies onto me for daft things like £30 to Orange etc, and I've maybe missed some DD over the last 5 years. I have a credit card with £100 limit on it, I'm using this to try and help repair my credit rating.

The sort of property I've looked at all below £100k, is it possible to get a mortgage with very little deposit, and with not the greatest credit rating?

I'm guessing no

kingstreet

There are family-support facilities from the likes of Aldermore and Tipton & Coseley which allow the lender to lend more by taking a charge over a relative's property and Lloyds and Marsden offer deals where a charge is taken over a relative's savings.

However, your credit history appears to make these options highly unlikely and I don't see anything in the market changing to get you a mortgage any time soon.

Pressleyno1

Is there anyway I can check my rating for FREE?

FireWyrm

In short, your guess is correct. Sorry. Forget it.

You might have had a small chance if you had a decent deposit, but the days of 100% mortgages are long gone. If your credit rating isn't absolutely perfect, even of you hade a deposit, you would have found it hard. Both together, adds up to a snowballs chance in hell.

My advice would be to re-assess your finances, rejiggering your debt, work like a slave and save your butt off to raise a deposit. In a few years, things might have changed sufficiently for you to get a foothold.

kingstreet

Pressleyno1 wrote: »

Is there anyway I can check my rating for FREE?

TBH no. There isn't. Not a meaningful one anyway.

Every lender has different parameters within its credit score and you may score more on one than another.

Please don't fall into the trap of paying Experian or Equifax then come back and say "my score is 999" because people regularly get declined for a mortgage and are affronted as they believed this score somehow made them bullet-proof.

The CRAs' scores are indicative only and you can get a high score with no job as these systems don't have that kind of information.

What I can suggest is you obtain your statutory credit files from all three CRAs, the £2 paper ones will do fine. Have a look on there, then post back with any issues you'd like clarifying. Alternatively, a better idea would be to take the files to a broker and get an opinion and plan for a mortgage in a year or two.

Svenena

Have a look at the article on this site about credit rating: http://www.moneysavingexpert.com/loans/credit-rating-credit-score.

You're on a good salary, so why not spend the couple of years saving hard for a deposit, and cleaning up your credit record at the same time, and then you'll be in a much better position to buy.

DannyboyMidlands

Your salary isn't bad so you just need to get your act together and save a deposit. I reckon you should be trying to tuck away at least £700pcm in order to have a decent deposit in 2 or 3 years time.

19lottie82

Erm, no.

So basically you want to buy a place but don't want to save up a deposit.

You make a decent enough wage. Get your head down and get saving for a deposit. it's not hard if you're determined enough. And as someone else said, this gives you extra time to build your credit rating again.

Doshwaster

If you say that your rent is easily affordable then that means you must have a decent amount of disposable income.

The only solution is to start saving that "spare" money rather than spending it. Do an analysis of where your money is going on a monthly basis and see how much you could afford to save by going on a crash cash diet by cutting out as much discretionary spending and luxuries as possible such as takeaways, weekends away and new gadgets. By saving £500 a month over 3 years will get you £18,000. That's getting close to 20% deposit territory. The chances are that in 3 years time house prices are going to be no more than today.

I was in a similar situation a few years ago, decent salary, affordable rent but no real savings. It's easy to drift into that lifestyle in your 20s as your income increases and you find your outgoings magically creep up too. The moment of revelation cam to me was when I did a spreadsheet of every penny I spent over a month and found that half of my income was just getting wasted.

Your income is good and your credit rating is fixable but you just need to put some effort into building up a deposit. Nobody is going to do it for you.

Pressleyno1

Quick update...

Saving is going well, got around £6.5k saved up now, however £2.5k of that is in a bond I can't touch until May 2014. I'm looking to save another £6k and I'm going to be really screwing the nut and going for it so this time next year I have £10k deposit.

Got a credit card with £100 limit, pay it off every month. I have however dropped into unauthorised overdraft on my current account 2/3 times, but accidents happen.

Fingers crossed I keep saving well!