First Direct - successful telephone application...first time buyer help

bairn7

Hi guys

I'm a first time buyer. I've applied for a mortgage with first direct and have just gone through the telephone application where they carried out a credit check and told me that the indications were that they would be able to offer me what I was looking for :j

I don't know how it all works so forgive me if this is a silly question. The lady said that this was not to be taken as a binding offer or an offer in principle, but was subject to satisfactory idendification checks and evidence of my income/outgoings.

That's all fine but how does it work now re: credit checks? There was a credit check performed today...is that it? The reason I'm asking is that I'd like to start buying furniture (I have access to the flat before completion) [purchasing from my parents] but don't want to start doing this if they are likely to check my credit again as obviously an extra few £k on the credit card may affect my score!!

Does anyone know?

Thanks! *excited*

betmunch

Just wait until you have drawn down the money.

Lenders are at liberty to do a credit check anytime they want, and that includes after exchange and before completion.

If they do this and find out that you have run up a load of credit card debt then they can reassess your affordability and reduce the loan amount which in turn could impact on your purchase.

First direct are particularly tough on people with existing commitments so just dont do it!!!!!

DannyboyMidlands

Chill out. They'll now send you all the paperwork for the full app. Fill it in, send it off and forget about furniture for a while.

If you need something to do then start gathering 3 months bank statements, payslips, your last p60 etc.

[Deleted User]

I wouldn't be buying furniture until you've exchanged contracts anyway

I found FD very good, brilliant customer service. If you have any questions they are great over the phone.

betmunch

DannyboyMidlands wrote: »

If you need something to do then start gathering 3 months bank statements, payslips, your last p60 etc.

Agreed. Much better use of your time

Gentoo365

Initial credit checks are more a test of 'reliability' and 'trustworthyness' than affordability. The assumption is everything you have said in your application is true.

They will assess affordability at the next stage (unless you are way clear and are fast-tracked). So keep your bank statements clear and don't go spending money you don't need to.

Once you have completed, paid the legal stuff and stamp duty and any other unexpected expenses, then you can look at your budget to see what you can realistically afford.

The bank expects that the credit card balances etc. are at the level you stated in your application. If they ramp up then they will have to adjust accordingly (probably by taking 3-5% from the card balance and subtracting it from your net salary).