Buying my second home advice

larks1981

Hi all, looking for some more great advice please.

Obviously with today's market it's difficult for first time buyers, but is it just as difficult for people looking to sell there first home and move to a 2nd larger home?

I understand everyone's circumstances are very different but these are mine and I would appreciate advice on my chances of getting a new mortgage with my existing company or a new lender is realistic.

I Own my flat. 130k mortgage. Property worth 140k. Owned solely by me. Me and my partner want to buy a property around 230k. Joint income of 50k. My credit history is bad but getting better. Hers is perfect. As well as the small equity in my flat we will have maybe 10k cash deposit.

Could we realistically get a new home at 230k? Are homeowners favoured more by lenders, is their lending criteria less strict as I own already...

Thanks in advance.

Thrugelmir

Besides your poor credit history. You appear to lack sufficient funds to buy a property at that level. Depending on your current interest rate you may well be better off paying down your mortgage for a while longer. Build some more equity while allowing time to heal your credit score.

I assume that your "bad credit" is now behind you, i.e. paid off.

kingstreet

Criteria is exactly the same. You'll also need a lender which will ignore the mortgage on the let property, otherwise your affordability will be hit by the payments for the existing mortgage.

You'll also need a bigger deposit. At least 10% with some lenders wanting 15% or 20% for a second property.

Finally, your credit history may leave you needing an even bigger deposit than that, depending on what's visible on the three different versions of your credit file.

This is going to be a broker job, to put the case together properly.

larks1981

kingstreet wrote: »

Criteria is exactly the same. You'll also need a lender which will ignore the mortgage on the let property, otherwise your affordability will be hit by the payments for the existing mortgage.

You'll also need a bigger deposit. At least 10% with some lenders wanting 15% or 20% for a second property.

Finally, your credit history may leave you needing an even bigger deposit than that, depending on what's visible on the three different versions of your credit file.

This is going to be a broker job, to put the case together properly.

Hi kingstreet, thanks for confirming about criteria. But I am selling first property, no intention to let. Guess the thread title could be misleading.

GMS

larks1981 wrote: »

Hi kingstreet, thanks for confirming about criteria. But I am selling first property, no intention to let. Guess the thread title could be misleading.

10k equity less EA and sols fees will leave 7k ish.

Together with 10k cash deposit it gives 17k. Not enough for a 230k property given credit history.

larks1981

Jeez. Can't believe 17k won't be enough but guess as a percentage it's not!

If we saved more and had a decent deposit. Does my shaky credit file become less of an issue?

Thrugelmir

larks1981 wrote: »

Does my shaky credit file become less of an issue?

Depends on what's on your file.

If you can afford a considerably larger mortgage. Then saving shouldn't pose any problem at all.

GMS

larks1981 wrote: »

Jeez. Can't believe 17k won't be enough but guess as a percentage it's not!

If we saved more and had a decent deposit. Does my shaky credit file become less of an issue?

17k on a 50k property lowers risk. 17k on 230k will almost certainly not cover potential losses.

Define bad credit. What and when and for how much?

Realistically if you defaulted on a 213k mortgage (230 less 17) the lender would lose. Arrears fees, default interest, agents fees, forced sale loss etc etc

larks1981

Bad bad. CCJs on a DMP etc.