Achieving the Impossible (FTB)

jon557

Hi,

I have been checking my credit reports and reading this site for years, but never needed to post before.

My situation, I earn £43,800pa in a very good engineering job - which I have been in for over 3 years now (after graduating).

I have a student Loan (£10k left) - minor item.
I have a personal Loan (£12k left).
A credit card (-£1200) - only reason for it is the 0% deal I got ages ago.

I have found a flat I want to buy for £130,000 - got an accepted offer last week.

The challenge starts here... The deposit, I don't really have. But, brokers have found some Mortgage companies happy to loan with the knowledge my deposit is from a new personal loan (but must be a different company). My plan, for a cheap flat, is to rent out the second room to my friend (this easily covers the borrowed deposit and then some). Gets me on the ladder and out of a shared house.

So issue number 1 is the deposit. Issue number two is a recently closed loan still showing on my credit report, looks like this will take 40 days to update to my credit report, so that doesn't help.

I had a broker at London and country search for me, she took 2 days but was unsuccessfully - because of the loan I just cancelled - it makes me look over committed.

My estate agent broker has been searching, he is better and has found two but they both failed at the soft credit search - not sure why, my score is very very good 800 to 900 on checkmyfile.com. Tomorrow he is trying one more company who he believes does not check credit files - a main stream company apparently.

Apart from that, I am completing an application for a 95% mortgage tomorrow with Yorkshire Bank - I can get the 5% from selling my car and buying a banger in the meantime.

Failing my last two options... Does anyone have any suggestions??? I earn plenty of money, job is very secure and not had rent problems for last 5 or 6 years...

There must be a way...

The estate agency are waiting but the owners have not found a place to move to yet, so I don't think they are in a hurry, in fact they said they will be happy to rent and get out of my way if needed.

Any comments much appreciated..

opinions4u

You appear to earn good money, have no savings and a lump of debt.

It's not exactly attractive to most mortgage lenders.

brit1234

Why don't you pay off the debts and save a deposit like everyone else.

How much have you got saved for mortgage fees, solicitor fees, stamp duty etc?

It sounds like you are after 125% mortgages. :eek:

destorius

Hey there!

I felt I needed to reply to this- not to give you the typical "save more money, clear your debts post" but to tell you my past experience. 8 months ago I was in a similar situation.... Earned £45k in rock solid job, out of uni for 3 years and desperate to buy a place. I had seen a repossession for £159k which was an amazing deal- 30k less then other flats in the block had sold for 3 months earlier- I had to have it! I had just about the 16k deposit and it was stamp duty free at the time so I put the offer in and it was accepted- here is where the problem started.....! At the moment, 90% mortgages are very tough to get, they almost look for reasons not to give it to you! I have 5k of a 8k loan outstanding and 2k on credit cards (had paid off student loan )- the highest mortgage offer I recieved was 132k.... Not enough and due to my credit commitments- I was gutted and had to withdraw.... Embarrassing!

So I had the decision to do what I could to sort myself out- paid off the loan and credit card (from deposit) and saved harder then before and now am buying another property (which is still a great deal) but have a mortgage at the best rate agreed with First Direct, still a 10% deposit but with money for revamping the entire flat, furniture, fees and first month mortgages bills etc and a 6k payrise.

Basically what I'm saying in a longwinded way is that, even if you get this place you will be broke, no cash for stamp duty, fees, furniture, the ability to make the place how you want it and more importantly to money at all for a rainy day. I advice to walk away and come back to this in 9 months.

Dave_Ham

I concur that if you have been in a decent job for 3 years + but have not saved anything will look grim on a lender front.

You have asked for help rather than a lecture, but be mindful unless you have been paying a massive rent (and can prove) then this will be hard work..

Be mindful that if you have been declined already, you have absolutely no chance at 95% LTV and I mean no chance!

If your parents have decent equity, you could be potential for a couple of 100% family mortgages out there although to be honest they do not hugely like unsecured debt either.

Sell car, get a banger clear the debt and save like crazy for a few months. Move back in with parents or family to redouble your savings efforts - short term pain for long term gain.

Good luck

The_J

Good advice so far, even from brit. Your credit score is too low for high LTV products, you can't even save a deposit on a decent salary which shows appalling financial management skills.

I wouldn't lend you a fiver.

jon557

Hi,

Some good feedback, thanks.

With regards to be refused, this has mostly happened at the affordability check (because they seem to think I have my old loan still). One or two failed after a "soft" check on my credit report - not a full report, so shouldn’t impact it too much.

Affordability wise, I am more than comfortable to handle a 95% mortgage and even an 85% with a borrowed deposit. I can afford it comfortably without renting out a room to my friend. When I rent out to a friend, I am only paying a few hundred more per month than my current place - so from £400pm to about £700ish.

Parents don't have any savings or anything like that.

I have not saved since Uni because I bought a nice car, nice furniture and drilled down on old Uni debts. I disagree with "appalling financial management skills" as I have not even thought about saving money for a deposit before last month. I was sending £800pm to my loan to pay it off quick, I guess I should have been putting it into savings instead - but that’s not good as it costs more in interest. I have a brilliant financial tracking system, a spreadsheet which details every element of my financial life - it's just I haven’t been saving.

Well. I shall find out today (I hope) if I am out of the game. But I have learnt a lot and will improve my situation a hell of a lot in the next 6 months.

Cheers, Jon

Dave_Ham

If you or your broker tell the lender the loan is clear, it will not impact affordability...

Good luck Jon

jon557

Ok thanks.

Yorkshire Bank offer 95% mortgages. But I just failed one of their requirements of <45% debt.

If I earn £2360pm into my bank and have £350 out for a loan and £720 out for the mortgage then my ratio is 47% debt.

Hmmm, but that is based on a 35 year mortgage, maybe I should try 38 years.

BRB

jon557

With 38 years, its a £704pm mortgage and brings me down to 45% dead on.

Lokolo

Would they lend based on 38 years? Most only go up to 35...

Personally I find it rediclous that you are on £44k and have a £12k loan, £1.2k on CC and no savings and you want to buy a house.