FTB, lots of questions!

buzzyzoe

Hi all,

I'm attempting to buy a house for the first time, and keep thinking of new questions!

I'm at the stage where I'm thinking of putting an offer in, so may be looking at getting a mortgage soon. I've read a lot of advice on this forum, and one of the things I'm worried about is applying for a mortgage and being turned down, as this shows up on your credit files.

I'm looking to buy a property for around £200,000 in London. I have a deposit of £145,000, so my LTV will be very low. This deposit is inheritance, and is in my personal bank account at the moment. Will I need to show any kind of proof of this?

I earn £19,800 per year, so will be asking for a mortgage of just over 2.5 times my income. I want to get the best possible rate, but don't want to risk being turned down. HSBC and First Direct have the best rates as far as I can see, but I've heard and read lots of bad things about HSBC's conveyancers, and apparently First Direct are very picky. Does it sound like it would be worth going to a mortgage broker to get some advice? And if so, how much (roughly of course) would that cost?

What do they normally ask to see before agreeing to a mortgage? I have a years worth of bank statements and pay slips, and a P60 from April.

I'm on a fixed contract at work at the moment, which is until September, but if I want to stay after then, I will definitely be able to. Will they ask to see an employment contract? Is it worth signing up to a new contract now so I have this to show them? I work in TV, so for the first year after leaving uni, I was freelance, which meant I was technically self-employed, and filled out a tax return. I earned less than £10,000 in this financial year, but that was because I graduated in September, so was working for less than 6 months of the year. Should I mention this?

Since March 2012, I have been at the same company, first on a 1 year contract, and now on a contract from March-Sept (It's a TV company, so not as unusual as it sounds - contract is until end of one series, but we're going straight into the next, so there's a job here if I want it for at least another year)

Sorry for the huge ramble! If anyone has any thoughts on any of this, it would be much appreciated!

demontfort

I just got a 65% LTV mortgage through First Direct on 2.5 x salary. All relatively speedy and no problems with valuation or underwriting. They wanted 3 months of bank statements, 3 months of payslips, P60 and lawyer certified copy of my passport. They didn't ask for proof of deposit, my conveyancer dealt with that and I'd been in my job for less than a year at the time. For the record I've appointed my own independent conveyancers.

They may however have minimum salary requirment but I'm sure a broker can confirm As an aside with such low interest rates I wouldn't plough all your money in as deposit, you could potentially borrow more and still set some cash aside. You are on relatively low salary in an expensive city so you don't want very last penny tied up in property. If I inherited £145k I could think of much better ways to invest than buying a house. Good Luck!

buzzyzoe

Thanks very much, all extremely useful to know!

I'm only 23 at the moment, and have only been working for around 18 months, so hopefully my salary will be going up relatively soon.

A deposit of £145K will leave me with approx £20K for legal fees and furniture, plus a contingency fund for repairs or in the event that I did ever lose my job and struggled to find another one straight away.

The benefit of putting the majority of money into the deposit is that mortgage payments should be less than £300 per month, leaving me with some disposable income after all bills/necessary expenses.

I agree that there are probably better ways to invest, but I'd be looking at £500 minimum just to rent a room in a shared house (still living at home at the moment), and would still have all the same bills etc, so my reasoning is that I'll be saving myself £200 a month, and will have a house to show at the end of it!

buzzyzoe

Ah, a quick google search has thrown up this: https://forums.moneysavingexpert.com/discussion/4018515

Looks like I probably won't be able to go with First Direct then.