Getting that first mortgage - credit history

smplkd

Hi there,

My girlfriend and I are moving in with my mum in February, for 12 months. Our collective income is £70,000.

The first 2 months, we'll spend getting rid of any debts we have - credit card, overdrafts - all in all come to about £4,000.

From there, the next 10 months we'll be saving £2,000 a month, giving us £20,000 in savings.

Her parents are helping us out with £20,000 too, so that will bring our pot up to £40,000. Out of that £40k, we're budgeting for £7.5k in all the fees, including stamp duty, as well as £7.5k for any home improvements and white goods.

We'll be looking for a 2 bedroom place in the suburbs of London (Beckenham, Sydenham, Penge) for a property up to £250,000. Currently, there are a few good fixed rate deals available for high LTV (90%) mortgages, most noticeably HSBC. So hopefully deals of such ilk will be better in 12 months.

We're thinking that we'll need a mortgage of £225,000. This is a lot higher than things I've seen on this forum before, but it's the only way for a lot of first time buyers in 2012/2013.

So, all makes sense... until...

My credit rating is currently Fair (rated by Equifax). This is based on the fact I owe £3,000 on my overdraft and credit card. However, as previously mentioned, this will be sorted this March, and I won't owe anything, besides my student loan.

Will the fact that I've only been rated as fair, 12 months prior to getting a mortgage, be held against me? I expect it will go up to good, or excellent, in the coming months.

Any help would be greatly appreciated.

Thanks,

Steve

kingstreet

How you are rated by a CRA isn't relevant. If you have no adverse credit entries, a good employment and residence history (on electoral roll) a decent deposit and don't want too much of an income stretch you should be fine.

Just do what you're doing.