Chance of getting a mortgage. Any advice appreciated.

FTBuyerGlasgow

I've been reading this forum for months now but here goes.

My long term girlfriend and I have been saving with Nationwide Save To Buy scheme which can get us up to 95% LTV mortgage. We won't be able to apply before the 6 month period which will be Oct/Nov. By then we will have a £6,600 deposit all saved up over a period of about 10 months (only heard about the STB in April).

The houses we're looking at are worth about £95-105k.

We earn a combined £42k a year gross in secure employment, no probationary periods etc. No dependents. Checked with Experian and Equifax, everything fine - no late payments or anything like that. I have a monthly loan payment of £175 but that's all.

Could any MAs provide some (non-binding, off the record) feedback - does our situation make it likely we will get approved for a mortgage?

Colin297

Im not an expert but surely you are a perfect candidate for a first time buyer mortgage.

Lawrie23goingon40

To give you an example me and the Mrs have just been approved for our mortage of £169,000 ish with a 42k deposit. We earn 50k together more with overtime/callout etc. We have no problems at all, used mortgage broker through estate agents and we are the perfect candidates!

The media is just scaremongering!!

Law

bowlhead99

Lawrie23goingon40 wrote: »

To give you an example me and the Mrs have just been approved for our mortage of £169,000 ish with a 42k deposit. We earn 50k together more with overtime/callout etc. We have no problems at all, used mortgage broker through estate agents and we are the perfect candidates!

The media is just scaremongering!!

To be honest, the situations are not completely comparable because although you are borrowing a broadly similar salary multiple, you were only trying to borrow 75% of the value of your property while FTBuyerGlasgow is looking to borrow 93/94% of his property (without first clearing his loan payments to someone else), and you used a broker (albeit, a tied estate agent one) rather than looking at one specific product from one specific lender.

Any estate agent muppet mortgage advisor could find you a 75% mortgage borrowing under 2.5x joint salary, because you're right, you were perfect candidates (it's a safe loan for the lender). But this is a different situation. So I would be careful telling someone who needs to borrow almost 95% of the value of their house that "the media are just scaremongering" because you as self described perfect candidates were able to get a mortgage with the help of a broker.

It would be like me saying "We got offered a mortgage with a great salary multiple as FTBs with Nationwide so I know they will easily lend half a million to three quarters of a mill to first time buyers, you will be fine borrowing 95k". I'd be conveniently ignoring the fact that the higher salaries gave us much more disposable income after essentials and we had a better deposit. (We didn't end up buying any where near the indicative limit that came up on the screen when in the branch).

I'd agree with Colin though, Nationwide can't advertise 95% mortgages to first time buyers without actually giving them out in practice, and it does seem like clean credit records and borrowings of under 2.5x salary would be on the lower risk end of the scale. The negative is the existing loan payment - any lender doing 95% mortgages will say that this monthly commitment would have to be taken off the salary multiple, in terms of checking how affordable your borrowings will be over time when interest rates might change.

How much is your outstanding loan? If for example you're due to be paying 175 a month for the next 3.5 years, by the time you get round to applying for your mortgage you might still have £6k of loan principal outstanding. Any sensible lender will say that borrowing £6k to 'save' £6k into a deposit account for a mortgage, does not mean you are really putting £6k of your own into the house at all. Whereas if you only owe a grand or two and you only want to borrow a lowish salary multiple (<2.5x is much better than >3.5x), you would probably be fine (if Nationwide said no, a decent broker could place you elsewhere).

So, depending on circumstances, you might get approved or you might not. I'm not a mortgage advisor but if you read enough of the threads here you get the gist of how it works!

TeamLowe

we was told by Nationwide for a 95% LTV save to buy mortgage we could lend up to 250k on 55k combined salary. nothing bad on credit reports apart from being in overdrafts, some credit card debt and a £204/month car loan

FWIW the adviser told us that they look 'favourably' on save to buy customers (ie not as many checks/bit more relaxed about credit reports than you'd expect at 95%) as you've proved that you can save a regular amount each month.

Mortgage approved with no issues for £92150, just waiting to exchange!

buzzyzoe

FTBuyerGlasgow wrote: »

I've been reading this forum for months now but here goes.

My long term girlfriend and I have been saving with Nationwide Save To Buy scheme which can get us up to 95% LTV mortgage. We won't be able to apply before the 6 month period which will be Oct/Nov. By then we will have a £6,600 deposit all saved up over a period of about 10 months (only heard about the STB in April).

The houses we're looking at are worth about £95-105k.

We earn a combined £42k a year gross in secure employment, no probationary periods etc. No dependents. Checked with Experian and Equifax, everything fine - no late payments or anything like that. I have a monthly loan payment of £175 but that's all.

Could any MAs provide some (non-binding, off the record) feedback - does our situation make it likely we will get approved for a mortgage?

I can't comment on your likelihood of getting a mortgage, but I would say make sure you've really thought through getting such a high LTV mortgage if you don't have much in the way of savings.

Saving £6000 in 10 months equates to £600 a month, which would probably be close to what your mortgage payments will be. Therefore you probably won't be able to save much once you're paying off a mortgage.

Do you have other savings as a back up in case one of you loses your job, interest rates go up etc?

Best of luck!

FTBuyerGlasgow

Thanks for all the advice folks!

buzzyzoe: we're putting away £700 a month in total but we're also paying digs to our parents of £300 (£150 each) so I'm pretty comfortable getting a £500-600 a month mortgage. I've budgeted it out and think we could run a house on £1000 a month it'll just be the big things we'd need to buy. Appliances, carpet, furniture etc. but we've been offered money from her parents which will help alot.

teamlowe: what deposit did you put down if you dont mind me asking?

bowlhead: got 31 months left on it. None of the loan has went into the savings though so I think we should be OK. Thanks for the long reply, must have taken ages!

Lawrie: thanks for the feedback! You've obviously got a much bigger deposit than us though!

colin: hope Nationwide think so as well!