Help the Hopeless!

timboy1984

Hi, hoping for some help here. I currently rent (rolling contract) with my girlfriend but the landlord has now expressed his desire to sell. He asked me whether I had any interest in buying which got me thinking. First of all, I'm going to be homeless unless I raise some serious cash in the next few weeks! Second, I have literally no idea the how I'd ever go about getting a deposit.

As many say, renting is 'dead money'. So how do I go about getting a mortgage from the following situation:

-I have no deposit
-I work full time on salary of £18950
-I have worked in the same role for 5 years
-I live with my girlfriend who has a temporary contract approx £250 (she has worked 3 months guarenteed role until January - maternity cover).
Her credit score is 3/5 and mine is 1/5
-I have no debts at all but she has a £1200 overdraft from university a few years ago.

Is there any hope of us ever getting a mortgage? Surely there must be something that can be done?

Any help would be greatly appreciated! I have absolutely no idea on mortgages - what is the best way to go?

If you were in my shoes - what would YOU do?

Caz3121

timboy1984 wrote: »

Hi, hoping for some help here. I currently rent (rolling contract) with my girlfriend but the landlord has now expressed his desire to sell. He asked me whether I had any interest in buying which got me thinking. First of all, I'm going to be homeless unless I raise some serious cash in the next few weeks! Second, I have literally no idea the how I'd ever go about getting a deposit.

As many say, renting is 'dead money'. So how do I go about getting a mortgage from the following situation:

-I have no deposit
-I work full time on salary of £18950
-I have worked in the same role for 5 years
-I live with my girlfriend who has a temporary contract approx £250 (she has worked 3 months guarenteed role until January - maternity cover).
Her credit score is 3/5 and mine is 1/5
-I have no debts at all but she has a £1200 overdraft from university a few years ago.

Is there any hope of us ever getting a mortgage? Surely there must be something that can be done?

Any help would be greatly appreciated! I have absolutely no idea on mortgages - what is the best way to go?

If you were in my shoes - what would YOU do?

Not sure if you mean to buy the property that you currently rent or another property

You are going to need a deposit there is no way round that, and if you have had past financial problems then it is likely going to have to be 15%-20%
What are the reasons for your 1/5 score....how long ago?

If it is less than 6 years ago, maybe look to rent somewhere cheaper than currently to allow yourselves to start saving for a deposit...once your credit record is clean for 6 years (so this depends on how recently your problems were) you can then decide whether to buy or carry on renting

What are property prices like where you live? You could probably look at 4 x income for mortgage plus deposit....would that buy anything ?

timboy1984

what about no deposit mortgages? How does that work and is it worth it?

GMS

There are 100% mortgages available if you have a relative willing to put up their property for the 'deposit'.

What is the problem with your credit? Any CCJ's/arrears/defaults etc? If so how much and when?

How much are you hoping to buy for?

hamster2013

lenders have become very cautious, and the 110% mortgages on self declared revenues are a thing of the past - the crisis has taught all the lesson a hard way.

anyways, coming to your situation, it will be hard (i do not want to depress you by saying impossible) to get a mortgage with what you have described as your situation.

If I were YOU - i would start saving.
you say you have been in the same job for 5 years - if its a big corporation, there are interesting employee benefits that help saving - or buying company stock at preferential rates etc... look into that.

I would ensure that I manage to save up to 5% of a deposit to make most use of the government lending scheme
so at 18k annual, i would think a bank would agree to loan me up to 72k if i had no debts
to improve my chances of getting that loan, i would try and keep it to maximum of 60k
which means that a property worth 80k maximum would fit my financial affordability
80k property
4k savings as 5% deposit
16k government deposit (20%)
60k bank loan
1.5k solicitor and bank and valuation fee's etc

so i would need to save up £5.5k before I could consider buying - hopefully if i had family who could help me get to that - i would make most use of it.
otherwise, i would have to ensure that i put aside around £300/month for a year to get to that target faster.

depending where you live, £80k can get you anything from a studio apartment to a 2bed apartment (i saw some in perfect condition in a good area leasehold apartment for £89k in the west midlands area) -
if you are in london area - it will be a struggle.

Bufger

It depends on the value of the house.

Mortgages work like this:

The bank have mortgage deals. They will loan you a certain amount at a certain percentage. The amount available to you will generally be 4x your annual gross salary (so 18x4). They also have a multiplier on the second income if you're applying for a joint mortgage.

A few years ago you could get these loans with no deposit. You could even get 125% loans where they'd loan you that cost of the house plus another 25% of that cost as an advance to do what you want with it (do the house up etc). Now since the recession they have started to lend with a little sense and require you to have a deposit - 10% is the normal amount but anything more is great (in increments of 5%). The bigger deposit the better the interest rate and the more options that are open to you.

The last part of the eligibility is their risk in lending to you. All they have to go on is your financial history - if you have a history of alot of well managed credit then you'll be good to go, if you've managed debt badly they run the risk of you defaulting and costing them money. If you're a high risk you will have less options and a higher percentage to pay.

My advice would be to save a large deposit. I'm guessing you're 28/29 by your name. You still have many years to get a mortgage so its completely doable. You need to work on your credit scores, clearing all of your debt and saving for a deposit and then there is no reason why you cant have a mortgage