1st Time Buyer Advice Needed!

jucee84

Hi,

My girlfriend and I are looking at buying our 1st house together.

We have a deposit of £15'000 between us and our combined salary is around £42'000.

I had a few accounts default due to missed payments 3-4 years ago now, although everything has been fully settled and has been for 2-3 years now. Never missed a payment since then.

Between us we have around £1500 on credit cards.

My parents have also offered to be guarantors on the mortgage.

What are the chances of getting a £115'000 mortgage towards a property valued at £130'000 in Scotland?

And if it's likely to be accepted, who am I best trying with?



Another question -

At the weekend we noticed a property, newly on the market last week, that is advertised as offers over £x. We called the agent this morning to arrange a viewing, however the receptionist told us that an offer had been accepted on the property! Can we still make an offer on the property? I'd have thought it would have appeared on the market as under offer first, thus leaving us open to make an offer ourselves?

Thanks in advance!

kingstreet

A few defaults and a 10% deposit are not the best route to securing a mortgage. I suggest you find a good independent or whole market broker and make an appointment to discuss your situation.

Obtaining copies of all three of your credit files may be good advance planning for the meeting, so the broker can see exactly what they are up against.

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/gb_consumerletter.ehtml

Experian

https://secure.wiseconsumer.uk.experian.com/wiseconsumer/secure_index.html?data=00

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=register_display&tpl=regPurchase

A vendor may choose not to entertain viewings once an offer has been accepted. TBH you are not in a position to make an offer, so you may have to let this property go.

jucee84

Even with my parents acting as guarantor?

paulmapp8306

Not in Scotland, but Ive just bought with a £37k income, and adverse credit history in the past (over 3 years ago). I had no issues getting a mortgage on the house which had an offer of £112k accepted. The only real difference was we had a bigger deposit - a 20% one (£22.5k).

if you can get a 15% deposit together I dont think you'd have an issue even without and guarantor - though use an advisor to find the best deal for your circumstances.

paulmapp8306

Sorry - misread your figures. Thought the house was £115k not the mortgage.

Still - its not out of the question on your income, but still think you may need a 15% deposit with the credit history, though by the time you have the extra the credit history will be further in the past so less of an issue.

kingstreet

jucee84 wrote: »

Even with my parents acting as guarantor?

A guarantor may help with an affordability stretch if you're a bit short on income. A lender not prepared to lend to you for credit reasons may still not lend to you with a guarantor.

Can your parents guarantee the whole mortgage payment for the entire term? Will your mortgage be paid off before they retire?

I stick to what I said in my first response. Find a good broker. The alternative is a load of trial and error credit searches which will do more harm than good if you don't find the right lender on the first couple of attempts.

jucee84

Thanks for the advice. Not done any searches yet, just illustrations which I know might not be accurate!

Dave_Ham

The credit files will be imperative as is a good broker.

Good luck

jucee84

the property is valued at £135k, and on the market at £130k fixed price.

Now......is it possible to get the mortgage for £135k, therefore leaving £5k extra after purchasing the property?

As I could borrow £5k off a relative to put an extra £5k towards the deposit, then give them the £5k back that's left over from the mortgage? Thus bringing the LTV down from 90% with a £15k deposit, to 85% with a £20k deposit

Would this be possible or is it just wishful thinking?

kingstreet

jucee84 wrote: »

Now......is it possible to get the mortgage for £135k, therefore leaving £5k extra after purchasing the property?

No. It isn't. Maximum loan is based on purchase price or valuation, whichever is the lower.

If you pick a product with a 95% maximum, it's 95% of the £130k you are paying, not the £135k value.

jucee84

Good news, got accepted for a mortgage up to £150k providing we have a 15% deposit! :j

Looking at £125k max now to avoid stamp duty. With 19k deposit now due to some generous family members on both sides! Meaning a mortgage of £106k.

Following quote is for top of our budget, borrowing £106k over 25 years with £19k deposit

2 year Fixed Repayment**
£583.49 Per Month @ Rate of 4.44%
4.2% APR
£0 Product Fee
£1000 Cashback, with further £150 as my partners current account is with the lender, additional £150 if I transfer mine to them also