Advice please!

skizz_b

Hi all,

Have had a proper read through a lot of the threads here and have to say most responses are very helpful, I now have a fairly specific question so thought I would post and see if you can help.

I have inherited £50,000 and we are looking at using this money as a deposit on a property. We are looking at houses in the £400-450k bracket. I am worried about our ability to get a mortgage is the long and short of it.

The information you will need to know is as follows:

- Our joint income is approx £75k per annum
- We are looking to purchase in November 2014.
- I am 29 years old and have had a full time job all of my working life. I have had credit issues in the past however all but one of these has dropped off from my record due to the 6-year rule. These “issues” were defaults on a couple of credit cards and an overdraft (long story). The last default will drop off in May of next year which means I will have a credit history showing as “clean” as of then, other than my current account which has had no issues. I have a very small amount left on my student loan (less than 1k)
- My partner is 25 and has 2 credit cards, one is completely paid off. The other has a comparatively small amount on (approx 2k). She also has a student loan which has a long while left to pay.
- Between us there is no other credit currently held.

So the question is, what is the best mortgage to apply for and how likely are we to get it on the high street? Will a broker be more likely to sort it out? I anticipate that I could get up to 70k on the deposit if required.

Thanks in advance for your help and happy to answer any questions!

gazfocus

I'm no expert but I would suspect that you will struggle to get more than a £300-325k mortgage on your joint income, but I would suggest seeing a broker every time.

Foxy-Stoat_3

At 4 times joint salary your looking at £300,000 plus your deposit plus fees, legals and stamp duty.

Either save a bit more or drop your purchase price a little.

Speak to a whole of market broker for the best advice.

skizz_b

Thanks guys, will speak to them and see what they say. The 300k figure for the mortgage itself is helpful.

Do we say 15% deposit is the magic number to make acceptance more likely?

skizz_b

Also, is the credit history going to be a problem?

gazfocus

skizz_b wrote: »

Thanks guys, will speak to them and see what they say. The 300k figure for the mortgage itself is helpful.

Do we say 15% deposit is the magic number to make acceptance more likely?

10% deposit would be possible but you do get better rates the higher deposit you have.

skizz_b wrote: »

Also, is the credit history going to be a problem?

If you're looking to buy in November 2014, your credit file will be clean well before then so wouldn't be a problem. Your partners also shouldn't be a problem as long as there's no late payments, etc. Also, the student loan won't show on your partners credit file and isn't really considered as far as I'm aware.

Foxy-Stoat_3

After 6 months would be a better time to start applying due to the recent bad marks...300k assumes 4 times joint salary which is probably a bit high...maybe 3.5 times joint.

Good luck there!

Thrugelmir

skizz_b wrote: »

Thanks guys, will speak to them and see what they say. The 300k figure for the mortgage itself is helpful.

Do we say 15% deposit is the magic number to make acceptance more likely?

Why not downsize your plans rather than play the boom or bust card?

Putting my lenders hat on. You fit the profile of someone who hasn't learnt their lesson despite previous experiences. You've an income of £75k but no savings. £50k has fallen into your laps. So you are off partying again. (Very predictable behaviour not uncommon).

On a personal level. Don't over commit. Do want a family for example? A huge mortgage for 25 years is a serious commitment that isn't to disappear for a very long time.

Foxy-Stoat_3

Thrugelmir wrote: »

Why not downsize your plans rather than play the boom or bust card?

Putting my lenders hat on. You fit the profile of someone who hasn't learnt their lesson despite previous experiences. You've an income of £75k but no savings. £50k has fallen into your laps. So you are off partying again. (Very predictable behaviour not uncommon).

On a personal level. Don't over commit. Do want a family for example? A huge mortgage for 25 years is a serious commitment that isn't to disappear for a very long time.

Don't be too hard on the lad, he is probably on the "spend as you earn" scheme, as am I and a lot of other peoples I know....if the joint income was £35,000 then they would still have no savings.

At least the debts have reduced and on track.

Either drop your target purchase price to say £275,000-£300,000 tops or save for a year and reduce your LTV, ideally you'll want 75% LTV to make it easier on your wallet and for the lender to accept you....also if the interest rates go up in a year or 2 you won't be over stretching yourselves.

silvercar

Stick the £50k in a savings account that you have already had open. That way you can say the £50k has come from savings.

skizz_b

Thrugelmir wrote: »

Why not downsize your plans rather than play the boom or bust card?

Putting my lenders hat on. You fit the profile of someone who hasn't learnt their lesson despite previous experiences. You've an income of £75k but no savings. £50k has fallen into your laps. So you are off partying again. (Very predictable behaviour not uncommon).

On a personal level. Don't over commit. Do want a family for example? A huge mortgage for 25 years is a serious commitment that isn't to disappear for a very long time.

Ah, much like a lender you are playing the presumption card

My income is 40k and I have a number of assets to show for it, all bought in cash. I haven't utilised or even applied for any credit in the past 6 years and I wouldn't be buying a house if I wanted to go off partying! My line of work also suggests I have an awareness of value for money and credit etc (I work in finance for the government)

In reference to the personal comment, we are getting married in May and intend to start a family in 2015. Our outlook is we would rather get as much house as we can now to ensure we don't need to move with kids etc. it is of course a big commitment but at the same time where we are in our lives it suits and we feel it appropriate.

That may seem a bit scowly but I do appreciate the reply and insight!