Help for a newbie first time buyer please

madisonjinx

Hi all,

If anyone could offer me some thoughts on the best course of action I would really appreciate this!

My husband and I have a combined income of £60k, we are 25 and 26 and have been renting for the last 6 years.

We are looking to buy a house, we are ok with our money but in all honesty only have £2k saved up. We have a Nationwide Save to Buy account and have just been putting a bit aside for the last few months and was hoping to get a 5% deposit with Nationwide.

We were happy to just save a little and take our time but then we have found the most perfect house, it's been on sale for around 6 months and now has been reduced to £109,950. Its absolutely perfect and I stupidly fell in love with it!. I have done the sums and figured out that by the end of February we will have the money together for a 5% deposit (£6k). This will include my end of year bonus and selling some of the shares I have in my company share scheme.

My credit profile is showing as excellent, I have had a credit card and some store finance but everything has always been paid on time. In the last few months I have been tucking into my overdraft and hubby has been using his but over next few months we have no intention of using them again.

I have checked hubbies credit score and this is only good, unfortunately there is a missed payment from Virgin media this year (hands up mistake) and some missed payments from 2007 (which I want to dispute as we have no recollection of the missed pyaments, or how you can get three missed payments in a month for the same finance agreement!)

Anyway, we went to see the house and spoke to the estate agent, he basically hinted that we should put an offer on the house as by the time we need to hand the money over we will have the deposit, but I'm a bit hesitant at doing that when we don't have a mortgage!

I'm planning on speaking to Nationwide in branch soon but was wondering if it is even worth it when we only have £2k saved up? Could we even go through the decision in principle process at the moment?

I'm really hoping people would give their thoughts on whether they believe we could get a mortgage and when we need to evidence to Nationwide that we have the full deposit, and if we were to put an offer in over the next few months, what money would we start having to hand over and when?

Thank you everyone for your help and please excuse my lack of knowledge around the mortgage process!

Dave_Ham

You do not need to have a deposit in place to offer or achieve a mortgage.

I do not necessarily agree it is a good thing to do though, as you will be putting yourself under relentless pressure.

95% mortgages are also the hardest out there, think you may be ok with the 2007 missed payments do not worry about the credit file score.

Food for thought, remember that neither the Estate Agent nor the Nationwide mortgage advisor are impartial.

All the best

beecher2

David, do you not think the missed payment from this year will scupper their plans?

OP, I'm sure another house you'll fall in love with will turn up once you've saved up a deposit - do you have all the fees associated with buying a house saved up separately?

Dave_Ham

beecher2 wrote: »

David, do you not think the missed payment from this year will scupper their plans?

OP, I'm sure another house you'll fall in love with will turn up once you've saved up a deposit - do you have all the fees associated with buying a house saved up separately?

To be honest I did not read the this year part, as focussed on 2007. At 95% you are correct, the missed payment in this year could be a dealbreaker.

A couple of the 95% LTV lenders may overlook if everything else is squeaky.

Have no experience of the Nationwide Save To Buy product

madisonjinx

Thank you for your prompt responses! It has definitely been sobering reading how strict the lending criteria is for the 95% mortgages.

I guess the best thing I can do is keep saving, if we don't get this house I think we will just save enough until we find another house we want and hopefully we will be in the region of 10% deposit then.

chrisfurbs

Dave Ham is incorrect here it depends on the lender as to whether or not you need to be able to prove the deposit before the offer is issued.

An alternative to nationwide might be market harborough worth a look to see if you fit.

Dave_Ham

chrisfurbs wrote: »

Dave Ham is incorrect here it depends on the lender as to whether or not you need to be able to prove the deposit before the offer is issued.

An alternative to nationwide might be market harborough worth a look to see if you fit.

Dave Ham is not incorrect, OP was talking about achieving an AIP/Application prior to having the deposit in place.

If a lender requests proof of deposit, then providing the deposit in place in addition to planned, support evidence is likely to suffice.

Before anyone only reads this post, still not something I am advocating by the way just answering the initial question.

chrisfurbs

Dave_Ham wrote: »

You do not need to have a deposit in place to offer or achieve a mortgage.

This is what i was referring to when saying you were incorrect you will not be able to Acheive a mortgage without the deposit in place.

One thing to consider is if you were to be receiving the remainding deposit as a gift from a suitable relative they would take a letter to this effect as proof of the deposit hence getting rid of the need for the funds to be place in your accounts before the offer is produced.

ferguson_tom

We made the mistake of looking at houses before we could buy one, we ended up having to beg and borrow the money which set us up on completely the wrong path with the house. We were a bit different as we moved straight from parents house to buying but our biggest regret is we didnt take another 12months to save up the deposit. If you do not need to move yet try not to and just save.

For us the dream house quickly become a bit of a nightmare as we started off in debt and have only just got out of it after two years. You will always find the perfect house when looking but there will be a different perfect house in 12months as well. The rate you will be paying on a 95% LTV mortgage will be pretty horrendous and waiting 12 months and getting a 90-85% ltv will be very beneficial and save you a small fortune in the long term.

Best of luck with it what ever you decide to do though.