First time buyer mortgage rate

AliceBanned

Hi

I am looking at a shared ownership property, share £62k. the only rate I seem to be able to get after credit scoring is 5.99% with a 15% deposit required. I don't have perfect credit history but it is nearly there - have regular salary, same job for years etc.

Should I be able to get a better rate or is this an ok ftb rate at the moment? Thanks

Gary123456790

Hi,

Can you expand on "I don't have perfect credit history" - the more information you can give the better your responses will be.

There is also a limited number of lenders in the shared equity market.

Gary.

AliceBanned

Hi Gary

Thanks - the only blip on my file is an "arrangement to pay" for a credit card debt which began in 2004 and i paid off slowly as they froze the interest. In two months' time this will have left my credit file as it will be six years since it was repaid.

I have £2k credit card debt, but have access to more on my (3) cards and don't use it (about £1.5k). Paying them off each month but saving for a deposit also and need to move for practical reasons so if the lenders allow, i would rather move and pay the cards off as I go, rather than before buying. I use my overdraft during the second half of each month at the moment - around £500 overdrawn with Halifax Reward account, on average.

Thanks.

kingstreet

There are better deals, but being able to tell which ones you might get?

No chance, I'm afraid.

You'd have to go through factfinding and probably have a few credit searches to do.

On what you've said, why aren't you waiting for the adverse to drop off your credit file?

AliceBanned

kingstreet wrote: »

There are better deals, but being able to tell which ones you might get?

No chance, I'm afraid.

You'd have to go through factfinding and probably have a few credit searches to do.

On what you've said, why aren't you waiting for the adverse to drop off your credit file?

Hi I'm not sure whether this bit of adverse credit would make a massive difference, possibly it would though?:cool:.

The only reason I'm not waiting is because I found a flat in the perfect area for me, that I really like. it could go any day if I don't move on it. maybe I should gamble on this and if it goes it goes. There are many flats in that area but not many I could afford, unless I save longer for a deposit, maybe another year. i must admit I am dragging my heels and undecided, not on the flat but on the finances. I could make the payments now but not get a great deal on a mortgage..

kingstreet

Did your adviser set out the best rates for you before telling you they were currently out of reach?

It might help to focus your mind if you saw the difference.

For example, I'm working on a SO case, 50/50 with a 95% mortgage. The best rate is fixed at 4.99%. So, you know once your adverse has dropped off, you can save at least 1% on the rate, probably more with your higher deposit.

Only you can determine if you should act now, or wait until later. The property may still be for sale in a few months.

kingstreet

As an example, the lowest 85% rate on shared ownership is 3.84% in England & Wales. This represents a 2%+ saving on what you're being quoted now.

AliceBanned

Hi, yes originally he thought 4.5% but this was refused after credit check. I then thought I may go for a lower share of the property. But I think staircasing can be expensive so the more I could buy now the better.

True it could be on the market still but it is one which may get snapped up. Difficult one..it had only been on the market for a few days when I viewed it, I for one jumped at the chance. But I have no idea whether there is a list of people waiting, or no one! I think I will contact checkmyfile.com and find out exactly when that arrangement will leave my file - may be just over two months.

The owner told me she has not done other viewings and won't this weekend as she is away. she isn't in a hurry and is not in a chain - was happy to wait until June until my finances are in place but the application needs to be now in order to hold it.

AliceBanned

kingstreet wrote: »

Did your adviser set out the best rates for you before telling you they were currently out of reach?

It might help to focus your mind if you saw the difference.

For example, I'm working on a SO case, 50/50 with a 95% mortgage. The best rate is fixed at 4.99%. So, you know once your adverse has dropped off, you can save at least 1% on the rate, probably more with your higher deposit.

Only you can determine if you should act now, or wait until later. The property may still be for sale in a few months.

Would you say 4.99% is a good rate for a first time buyer? I guess with 95% LTV it is.

kingstreet

It's not the FTB bit which determines what's a good rate. It's the quality of the application data, deposit, multiple of income etc.

If you're being offered 7%, 4.99% looks great.

If you don't qualify for 4.99% though, it's a moot point.

Thrugelmir

AliceBanned wrote: »

I use my overdraft during the second half of each month at the moment - around £500 overdrawn with Halifax Reward account, on average.

This would suggest to any lender that you aren't in a financially strong position to manage a mortgage. The slightest financial distress would cause severe problems.

Suggest you use your savings to clear your debts fully. Learn to budget within your means i.e. no use of overdraft. Then move forward from there.