Getting my first mortgage

fincherley

Hi all,

I'm a first time buyer (and first time poster here) and I just wanted a little bit of advice concerning my situation. Here it is in a nutshell:

1) I will be relocating to the Midlands from London in three weeks and will be earning £21.5K plus bonuses in my new job.
2) I'm looking at properties around the £130K mark - is this realistic?
3) I have no credit card or overdraft having cleared these (£7K worth of debt) a year ago, but prior to this I did struggle occasionally with staying within my limits.
4) I made the terrible decision of using Wonga a few times in the past year - these were always paid off on time or early. I've been reading the MSE forums for a while and know this could have a negative impact as lenders will see it as a sign I can't handle my money, but I've not resorted to this for several months now.
5) I will be buying on my own, but my mum will be available as a guarantor if necessary
6) I will have a deposit of £20K (again, thanks to mum - don't know what I'd do without her!)

I know my credit history hasn't been great, but it should be better now than it was a year ago, and I'm hoping the presence of a substantial deposit and a guarantor will help considerably.

I've read the MSE mortgage guide from cover to cover and I think I need to get in touch with a broker like London and Country, but I believe they just do over the phone and I think I'd rather sit down with someone. Any advice regarding good fee-free brokers in the Solihull area would be much appreciated!

I was also wondering about the order of things - am I better to get a mortgage offer before I find a place or vice versa? What sort of timescale do mortgage offers tend to work on, i.e. how quickly to lenders tend to make decisions? Would an unsuccessful application negatively impact my credit rating? I know with loans you shouldn't apply for a while after having an application rejected - is this the same with mortgages?

I'll be staying with my mum for a few months until I get my own place sorted, but I don't want to be under her feet for long; she's already been wonderful! I just thought I'd come on here and get as educated as possible so I can manage my expectations.

Thanks in advance for any help you can offer!

Ria

jucee84

was in a similar situation to yourself, try halifax for a mortgage. I done it over the phone today & got approved for a mortgage up to £150k providing I have a 15% deposit. Valid for 3 months, after that I'll need to apply again with another credit check.

Thrugelmir

fincherley wrote: »

Thanks in advance for any help you can offer!

While your living at home save some money and increase the size of your deposit.

Your mothers goodwill gestures may not be sufficient to get you onto the ladder.

fincherley

Thanks, guys.

Jucee84 - did you go via a broker or straight to Halifax?

Thrugelmir - will definitely be saving up as much as possible whilst at mum's. Hopefully every little helps!

happycamel_2

Tbh, you need to have a careful think about whether you really are in a position to buy just yet. You need solicitors and search fees as well as the deposit. You'll need an decent emergency fund for house maintenance and you'll be paying building and contents cover for insurance. Utility prices have just gone up nearly 10% and you'll be too late to fix at a lower rate. If any of this has to come out of the 20k then you're deposit may be lower than you think.

It's great that you've read the mortgage guide in such detail bit make sure you understand the whole cost of buying and owning a home. I had a nasty surprise when I bought my first one and needed a second job to pay for a new water tank 6 weeks after moving in, luckily the plumber let me pay in installments and I didn't get in to debt but times aren't as easy now.

Good luck.

Dave_Ham

This is achievable, but will be tight.

Given the geographic change, will employment change?

I suspect you will struggle to get a fee free face to face broker. L & C business model is a numbers game and hence with economies of scale, they are fee free.

You are wise for a local service, as you are likely to need to be supported through the process and L & C are not necessarily built for this.

Be aware though, that typically a broker would receive approx £300-£350 for this mortgage, so you may struggle to get anyone to take it on fee free.

All the best

maninthestreet

You're looking at borrowing more than 5 times your salary and bonus.

Dave_Ham

maninthestreet wrote: »

You're looking at borrowing more than 5 times your salary and bonus.

I read it as properties at £130k mark, which means £125k as no-one buys at £130k given stamp duty with £20k to put down.

This will be 5* £21.5k (no debt) and therefore is just about near as dam it including overtime at 50-60% of whatever last 3 months are.

The employment factor will be more worrying, unless work has already agreed to relocation...

kingstreet

Assuming no breach of the £125k stamp duty threshold, this is going to be just under 5x basic salary. There are a handful of lenders who will look at this.

Tell us about the employment situation. Is this a new employer, or are you moving within a firm? Is there a probationary period?

What EXACTLY was wrong with your credit history?

I know my credit history hasn't been great

Are we talking about the odd late payment or was there anything more serious?

I suggest obtaining an agreement in principle so you'll know exactly what your maximum purchase price will be. I agree with Dave about the broker. Whole market would earn a commission of around £330, so a fee on top is likely. My colleague in Birmingham charges £249 in such circumstances.

fincherley

Hi all,

Thanks for your thoughts.

I am starting a new job this month, immediately after I move back to my mum's; this has all been confirmed, hence why I know the salary details. There is no probationary period. Realistically, I think I'll be buying around Spring, so I'll have been in the role for a few months by that time

Re: my credit history - nothing more serious than a few late payments and going over my overdraft. No CCJs or anything like that.

I had envisaged properties on the market at £130K would end up going for less than that, so I have taken that into account - ideally I don't want to have to pay stamp duty.

Happycamel - I will be staying with my mum for a few months, so will have time to accrue a bit of a buffer in case of emergencies, meaning my deposit will remain intact. My dad's quite seriously ill and my parents want to help my sister and I get on the property ladder now.

I think I'd rather pay a few hundred for a good face-to-face broker who would be on hand throughout the process, as Dave and kingstreet suggested. Question is, how do I separate the wheat from the chaff? If they failed to find me a lender would they still charge me?

Thanks everyone!

Dave_Ham

Its all about a personal recommendation if you can get one. Check the brokers terms, although most do not charge without success.

All the best