FTB wanting a little reassurance

timehastoldme

Hi,

My husband and I have decided to take the plunge and buy a house. We were pretty cheerful renting but recently the estate agents have been very unreasonable, some work has been done to the house that has detracted from our enjoyment of it and we've got the deposit so figured we'd take the plunge while house prices are reasonable.

We've got at least enough for a 15% deposit on a house in the £125-135,000 bracket with more than enough left over for fees and moving costs.

I'm a part time teacher on £20,800 and my husband works for a university and earns £22,500. We have nothing significant we pay out for monthly.

The deposit is part saved but really helped along by a gift some months ago from family (20% saved/ 80% gifted)

We had significant loans and credit (0% transfers to absorb cc loans) which we paid off in full within the last six months. I had been banking with the Co-operative but we both switched to First Direct because we were getting less impressed with the co-op and also opened a joint santander 123 account to take advantage of the 3% interest over £3,000. We lived in London, and ended up leaving to work on reducing debts - just wasn't possible there with the position we were in.

We've just closed all accounts we're not using - not all of these have shown up on the credit report yet, so I'll be nagging them to list as settled.

My credit report is fair (803 not that it means much) the only negative factors being the new accounts opened recently - the santander will be 6 months old at the end of this month so I think that will balance itself out then. The account says I'm using 25% of my available credit - which isn't true, I'm using 0%, but the Co-op haven't updated yet so again, I think that will balance out.

My husbands is similar except for a default to British Gas that was added in error - we used to rent a tiny flat above a bank, and once they charged us for the whole building, we sorted it out at the time and they admitted the error, but it's resurfaced again and they've added a default for a whopping £6,000 on there. It will be removed very soon! They've admitted fault, so we're nagging them again today.

When I was a student I was terrible with money and got into all sorts of trouble, over 10 years ago now, in the last few years I've been so careful with all my accounts and am so pleased that the credit report was ok! I'd been terrified of doing it for years because of mucking up when I was 19 and stupid.

Mortgage wise we'd like to apply with First Direct fixed for 5 years. The other half is applying for a PhD with funding starting next September, but he'll be doing the PhD either way, we have enough with savings left over and my salary to comfortably cover all outgoings if his stipend doesn't come through. This is why we'd been putting it off, but after some sums, we are confident it'll be fine and he'll be sending off letters to apply for grants etc as well. I'm part time by choice, if I needed to I could go full time and bring my salary up by around £10,000 p/a.

We had wanted to go for a longer term mortgage - 30 years. We're 32 and 31, and as a teacher I'm likely to be still going until I'm about a hundred anyway - but aren't sure if this will harm the application in any way.

We're going to look at a selection of houses in the area we like and are hoping for something where there's scope to add a little value without being anything utterly scary. We're working very much with brain rather than heart on this one. We're taking someone we know with a keen eye and proper local knowledge to view with us as well.

We've not applied for a mortgage yet, waiting for those credit report things to sort themselves out first, but does anyone have any advice for people in our position?

ACG

I cant comment on first direct specifically as they do not deal with brokers. From what i can gather they have "unusual" underwriting in that it seems to be quite strict but then occasionally i see the odd person on here who i would have expected to get declined - gets accepted.

Assuming you get that default removed (and i would wait until it has been removed before making an application to FD) then i cant see you having any major problems. Even if FD direct do decline you, i would be very confident you could get a mortgage elsewhere.

timehastoldme

Thank you, that's really reassuring!

amnblog

First Direct have income threshold limits (discussed on this forum only last week) which you do not match based on what you have said here.

You should get yourself some advice from an independent mortgage broker as this is all new to you.

kingstreet

I still think that FD £50k min income only applies to offset.

Did anyone come back and say they'd checked it?

timehastoldme

I also think the 50K minimum income is offset. If I go through the FD mortgage calculator on a repayment mortgage with the values in my first post, and then the 'how much can you borrow' calculator where I plug in our salaries, it doesn't raise any issues and says we can borrow £173,000.


If I try to use the same calculator for an offset mortgage I get this message:

Sole applicants must have a minimum salary of £50,000. Joint applicants must either have a minimum combined salary of £75,000, or one party have an individual salary of £50,000 or more.

I know the calculators are a blunt tool, but if it warns of a minimum salary for one, I think it would warn on the repayment as well if that were an issue?

kingstreet

Well done.

I just came back to say the same thing. I played with it and it still gives an output for a £24k pa salary.