Flat purchase disaster and now I want to buy a car

pittpurple

Hi,

Would really appreciate any thoughts on this, am struggling to know what to do next. My husband and I put in an offer on a flat 2 months ago and it was accepted, we had our mortgage approved without any issues at all and everything was set up to move on the 1st May. Then the sellers or their solicitor randomly changed the move-in date by a month which was impossible for us to manage as we'd already given notice on our rental flat. We pulled the offer and are in the process of sorting out cancelling the mortgage, etc.

We've found a 6-month rental and want to re-start the process in a few months. However, we ended up with an unfurnished flat in the panic and will need to buy some furniture and we'd always intended to get a car around this time. If we use our deposit money to pay cash for all of this, we'll be in trouble in 6 months time having the full deposit amount. We'd intended to do a 0% finance on any or all of these and just set up monthly payments but I'm concerned that applying for a credit card or a store finance offer at this point will mess up our credit score enough to affect our new mortgage application in 4 months.

We have absolutely perfect credit, no debt and have never been late on anything. Would a loan of say £5K really affect our ratings that much? We were approved for a mortgage far larger than what we are comfortable with so will be taking a mortgage roughly £100K less than what we would be able to do.

Thanks a lot for any thoughts.

hazyjo

Is this England/Wales? (Different law in Scotland.)

(Presuming the first.) You should not give notice on a flat until you have exchanged - not before. Completion dates are always subject to change before that (as you've now found out).

Still not sure why you pulled out of buying the house. Unless Scotland, and unless you'd exchanged, how can anyone predict a 'moving date' of 1 May when you were probably at least a month away from that date?!

Buy second hand/borrow. What do you really need for 6 months? Check out ebay, gumtree and freecycle.

Credit is okay so long as you pay it off. BUT if you still have a loan/money owed elsewhere when you come to buy, yes it will affect what they will lend you. I definitely wouldn't be applying for any new credit cards.

If you're £100k or so under what they'll lend you, I doubt it'll make any difference - but don't hold me to that!! I'm not a mortgage lender!

Jx

PasturesNew

Actually, what you should have done is to go with the new date and inform your landlord you weren't moving out for another month .....

Although you've given notice, if you didn't move out it'd have taken them a court visit to get you out - which would have taken a lot longer than the month you needed - and they'd have not done it. They'd have simply been "a bit annoyed" at you and that's it.

marathonic

It's not just the credit application and the amount owed, the banks also look at the trends in the overall debt.

That means that, if Person A has a credit card bill of £5,000 that was £8,000 last year and has been slowly reducing since whilst Person B had no credit 6 months ago but has now amassed credit card debt of £5,000, then the bank will obviously look more favourably on Person A.

pittpurple

I'm in Scotland, sorry, should have said that.

We had been given notice on our flat so we decided to try and purchase. Everyone said it was fine, our solicitor and mortgage advisor and their solicitor all said the dates were fine and everything was organised for the 1st May. The owners of our current flat are coming to Edinburgh from California on the 4th of May to paint and decorate the flat to get it ready to sell so there was no way we would have refused to leave.

It sounds like it very well could affect our rating. It seemed like a poor financial decision to buy stuff off Gumtree now and then buy nicer stuff in 6 months. If the consensus is that getting a loan for a car would affect us very badly we can borrow that money for the car, I was just hoping not to have to do that.

Pixie5740

Had you already signed the missives when they decided to change the move in date?

hazyjo

You can get a fridge/freezer and a washing machine for £50 each. Sofa - either free, or up to £50. What else is urgent? Bed? Would you have the dosh for that without getting into debt? I would expect so.

Wouldn't call those prices a poor financial decision. You could always re-flog them at a later date.

I was going to be without a washing machine and f/f for at least a few months when I moved house as I was getting a new kitchen & appliances put in. Picked up cheapies on ebay and gave them away after. £100 or so for several months didn't seem extortionate.

Jx

ging84

if you have new finance agreements it will affect your affordability
if you were at the maximum borrowing they were able to lend you, then buying a car on finance will normally reduce the amount they are welling to lend, but you might be able to get the amount back up by borrowing over a longer term