First time buyer questions

nurse-money

Hello

Me and my partner are looking at buying our first property.
My salary £32,500 plus £6,000 from overtime/extra
Partner (student) income £5,000

we will have a deposit of about £15,000 thanks to bank of mum and dad.

My credit, not great. 2 defaults about 3-4 years ago. About £6,000 on credit cards at present. No missed/late payments for a long time.
Partner's credit perfect.

We would be looking to spend around £130,000 to £150,000 on our first house.

Is it likely if we applied we could get a mortgage?

Would it be better for me to apply by myself without my partner due to their student status?

Thanks in advance! :j

bigadaj

Looks tight, might. Be an idea to go to a broker.

nurse-money

Thanks for the reply.

Is a broker likely to be able to find us something?

Or would I be better clearing the credit cards, POSSIBLE within 6-8 months. The relook at this?

bigadaj

Brokers will be along soon to advise hopefully. The main issue is that it's likely that any debt will be subtracted against your deposit, and the deposit is currently only 10% ish, gifted deposit also doesn't look good as you haven't had the discipline to save up. Would try and clear cards if I were you.

Thrugelmir

Credit card debt along with gifted deposit does not score you highly as a potential borrower.

Personally I would address the credit card debt.

The offer from your Mum and Dad. Should be sufficient incentive for you to spend the next 12 months getting your finances in order. As a platform for the future. Don't waste it.

kingstreet

Two defaults and 10% deposit?

Oil and water. I don't fancy this too much.

You need to get hold of all three of your statutory credit files;-

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/order.ehtml?prod_cd=UKSCR

Experian

http://www.experian.co.uk/consumer/statutory-report.html#orderReport


CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=basket_add&tpl=setRegister&package=63&amount=1&mode=clear

which you should take along to a meeting with a good independent or whole market mortgage broker. Ask friends and relatives for a recommendation. Failing that, use https://www.unbiased.co.uk remembering to switch off "sponsored ads only" option so you get a full list, not just the paid-for adverts.

The £2 statutory paper files will be fine. Avoid online schemes you have to pay for which give you your inside-leg measurement and call it a "credit score" as this is different to the lender's, the one which actually matters to you...

kidmugsy

Would Mum and Dad let you use part of their money to clear the c/c debts? That would surely let you save up faster?

Should you be buying now when a new graduate (in due course) may have to move somewhere else in the country to get work?

Toad

With that credit card debt and those faults, why not get those paid off first and wait a while for the credit record to look better? Surely you'd get a better deal if you're in a stronger position?
Maybe get the 15k invested somewhere safe so it's still there in a couple of years then just wait.

A mortgage of 150k - 15k deposit will result in repayments of about £800/month on a 4.6% mortgage interest rate which seems to be around average for first time buyers with 10% deposit, from what I've seen.

We're considering that in 5-10 years this could easily go up to say 6% (looking at history) or higher. Just 6% makes the repayment £880.

This has us running scared at the minute. Especially we if end up with negative equity so even trying to downgrade would be difficult.

Our situation, income 39k, debt free, career progression going well so I'd expect 45-55k in the next 5 years (but that's not certain so we're planning as if I've already hit my ceiling)

T

ACG

This is very very tight.

I think you would be best getting those credit cards either paid off or at least getting the balance down to say maybe half. Its that which is going to affect your affordability.

But i dont think the adverse is a major issue or the gifted deposit.

Toad

It was mentioned that the gifted deposit could be a negative aspect, would this be the same when the deposit is an inheritance?

thanks
T

nurse-money

Thanks everyone.

We are going to concentrate on clearing the CC debts first.