Chances of getting a mortgage?

twilightkisses

Hello,

I am wondering what my chances are of getting a mortgage and any advice would be much appreciated. This may be a bit long winded, but please bear with me!

Myself and my partner earn £40,000 per year and currently have savings of £12,000. We would like to look at a house which is currently on the market for £70,000 with the intention of putting down a 10% deposit and having a £63,000 mortgage, leaving us with £5,000 of savings to cover other costs.

I put £600 into a joint account to cover the rent and water at £475 a month, gas at £30 a month and Virgin at £41 per month. He pays the council tax at £98 a month and electric of around £30 a month. He puts away £500 a month and uses the remainder of his wage to cover our food and anything else - if there's anything left at the end of the month, this also goes into savings. I'm sure that having a mortgage would be substantially lower than paying rent.

However, I was irresponsible with money when I was younger and am now in debt to the tune of £6,636.31. My debts are as follows:

Credit card: £1,989.11 - max £2,450 min payment approx. £48
Credit card: £1,165.88 - max £1,250 min payment approx. £36
Overdraft: £1,981.32 - max £2,000
Overdraft: £1,000 - max £1,250
Overdraft: £254 - max £500 (this is paid back every month from my wage, but inevitably I end up going back into it)

I've always tried to pay off at least the minimum amount each month but I have two missed payments, one in March 2011 and one in May 2011 on each credit card. I also took several cash advances as I didn't realise at the time that this adversely affected your credit history. These are from May and June 2011 on one credit card and March, April and May 2011, July and August 2010 and March, April and May 2009.

I also have a phone contract which has always been paid off on time each month since November 2010 and a catalogue account which I have one late payment for in February 2010 - my limit on this is £2,600, but it is not being used. He has a phone contract which is paid off every month and no other credit commitments.

I realise my chances of getting a mortgage are pretty slim, but any advice on improving my credit history in order to get on the housing ladder would be greatly appreciated. Would it be better for him to apply for a mortgage on his own as he earns the higher wage, with me paying rent?

Thank you.

Wh05apk

I think you are worrying needlessly, your income is easily enough to meet affordability, your missed payments are quite old now, so I think you should be ok.


I think it would be worth getting an agreement in principle first, and if it fails try at £62,000 rather than £63,000 criteria at 90% tends to be different to 89%!

ACG

I think you will be fine in the main, but i think some underwriters (and i as a broker) would question how on £40k income you have so much debt and all close to the limit (your using around 90%) when you have so little outgoings.

twilightkisses

Thank you for your replies, it's much appreciated.

I failed to mention that I have a lease car through work - £300 a month comes off my wage before I receive it and my partner pays around £100 a month for petrol as we share the car.

Does this reduce our chances?

Thanks.

ACG

You need to speak to a broker or sit and go through lenders affordability calculators.

If it passes affordability, i would then call the lender and ask them whether they are happy with you having over £7k worth of credit and using over £6k of it.

You need to be speaking to a broker or the lenders directly. Personally i do think some lenders will decline this despite your income being good.

twilightkisses

Thanks very much, ACG.

Have you got any suggestions on finding a reputable broker? I'm not entirely sure where to start.

charleyroo

twilightkisses wrote: »

leaving us with £5,000 of savings to cover other costs.

use some of this to pay some off maybe? i would say you don't need 5K.
£1k for solicitors
£300 for homebuyers report
£100 mortgage fee maybe?
£100 rent a van, move yourselves
Assume you already have furniture?

ACG

£300 for a homebuyers report? I would say for £300 it would be a basic valuation? I do agree with the above though, unless you need furniture your not going to need £5k to move, but see what the broker/lender says before paying it off if you dont want to pay off a lump sum.

Do you have any friends/family who can recommend a broker?
I would suggest avoiding estate agent based brokers.

charleyroo

ACG wrote: »

£300 for a homebuyers report? I would say for £300 it would be a basic valuation?

hmm depends on house price i guess. OP is looking at £70k property. My bank would charge £300 for up to £100k property.

+ 1 on the broker suggestion. brokers are worth their weight in gold!

twilightkisses

Thanks ACG and charleyroo.

Is it possible these days to get a sole mortgage, with the partner paying rent?

charleyroo

my mortgage is in my own name due to partners' adverse credit history.

it's quite strange, as i always expect probing questions as we combine our salaries into one account and spend together (we are happy to do this, as trust each other infinitely, and are marrying in 6 months)

it's always been blatantly obvious on any bank statements i send off for mortgage purposes, and no one's ever asked. obviously i only declare my income on any apps, etc. i am sure i have read somewhere of others having issues though.

also depends on the sole applicant's salary. i earn more than double what my OH does and have not needed my partner's income to qualify for my previous or new mortgage. not sure what the stance is on declaring 'rent' as another income, as i don't do it.

i always get him to sign (forget the official name lol) the squatting waiver though!