Do I have a chance? FTB/ Debt - Help to Buy

cacpearce

Hi all,

First post I have done and I need someones advice on whether I have a chance in getting a mortgage...
I have been reading the horrors of the new MMR changes that have come into force this week and I am hoping someone will give me a chance to get on the property ladder.

Right so combined income per annum - £62 K - Also bonus of £7275 this year. Both expecting pay rises this year and my wife gets g/teed £1.5k increase per year.

Now for debt - total £38k - of which £12k is HP on a car & £26k on credit cards - this is between myself and my wife - all of this is very manageable - never missed a payment and I am paying down this debt easily but won't be done before mortgage application.

So want to borrow 75% LTV of a house worth £188,950 on the government help to buy scheme.. new build.

We have deposit gifted to us 5% - £9,425 - stamp and legal paid for by house builder.

What are your thoughts - have a feeling the debt is going to be a big no no - looking at Halifax as lender. My broker is meeting us next week to go through this - is this because she thinks there is a chance or financial reward for her?

Any replies much appreciated.

DebtFree14_2

We need to know the minimum payments per month really. The amount of debt does not matter as much. Also your take home salaries would be good too please

leveller2911

DebtFree14 wrote: »

We need to know the minimum payments per month really. The amount of debt does not matter as much. Also your take home salaries would be good too please

Really? with an income of over £62k a year and a gifted deposit gives the impression of not living within their means.

£26K worth of credit card debt does matter when there is no trail of managing finances.

I'm sure the mortgage advisors will have a solution. From reading endless threads on mortgages I think the Nationwide BS are bending over backwards to lend to anyone .....

cacpearce

DebtFree14 - thanks for the reply - was under the impression that they work out minimum payments on credit cards as 5% of the balance?
If I am wrong then this is good as minimum payments are nowhere near this amount - talking total repayments for all credit cards combined £450 - we overpay this every month anyway.

Net incomes are £1620 & £1798 after all deductions - pensions/ student loan/ company car tax & contribution.

leveller2911 - I can see that you might think living outside means - probably in the past but not now, I prioritise my payments and make sure everything is paid - definitely don't struggle month to month.

Also I have a DIP with Halifax with all the above declared.

Thanks for coming back to me

DebtFree14_2

leveller2911 wrote: »

Really? with an income of over £62k a year and a gifted deposit gives the impression of not living within their means.

£26K worth of credit card debt does matter when there is no trail of managing finances.

I'm sure the mortgage advisors will have a solution. From reading endless threads on mortgages I think the Nationwide BS are bending over backwards to lend to anyone .....

Actually I have just had an appointment with a mortgage advisor and they are not looking for how much you owe but that you are not paying over a certain percentage of your wage on your debts.

For example I pay maintenance for my daughter. I pay £300 and have about 10 years until she is 18. He put the outstanding balance as £36,000 on the form!!!
Affordability said I could borrow £180,000

Its all about monthly available income and obviously a good credit rating.

leveller2911

DebtFree14 wrote: »

Actually I have just had an appointment with a mortgage advisor and they are not looking for how much you owe but that you are not paying over a certain percentage of your wage on your debts.


Its all about monthly available income and obviously a good credit rating.

Then they are looking at how much you owe, just relative to disposable income.


I'm not a mortgage advisor but common sense dictates that lenders want to lend to people who they believe will pay them back and when a lender sees a credit card debt of £26k on an income of £60k and NO history of saving for the deposit alarm bells may well be ringing.

Lack of saving for a deposit will ring bells IMO......... When the OP says "we don't struggle month to month" would raise the question why is there a £26k CC debt that hasn't been paid off?.

Thank the Lord stress testing has come in ...........

cacpearce

DebtFree14 - thats encouraging - well not the fact that they saying you have £36k left to pay but the percentage side of it. Hope you application goes well.

leveller2911 - been more of a case of we have seen a house and I have managed to negociate a good deal on it so its more of a case of lets take the plunge and see if we get it scenario.
Also I have various other lines of credit that I have paid off in full in the past and most of the time early, these credit cards have an APR of 5.9% & 6.9% so looked at them as 'cheap' lines of credit.

I see this debt amount reducing significantly even with a mortgage in next few years.. embarrassed to have it!! The rent we pay now is same as mortgage would be - never missed that payment in 7 years..

brit1234

Pay off your debt and save a deposit then look for a property. If you can get a mortgage in your current status then I will lose what little faith i have left in this financial system.

cacpearce

brit1234 - thats the plan if the mortgage doesn't come off, only means a 12 month delay in getting on the ladder so not a big deal.

Just trying my luck as this new build I found is a good deal. The thing is though £26k is not a lot to pay in the grand scheme of things and was used to pay for our wedding.

tomtontom

The words 'new build' and 'good deal' are rarely heard together, except from new homes sales agents!

cacpearce

tomtontom - didn't really want a new build to be honest but 4 bed house detached - garage - large garden - £15k off price, stamp paid/ legal fees paid, carpets, upgraded kitchen, upgraded bathroom and moving costs... sits well with me for my first home and the main thing in an area we want to be in!

Don't worry I am going to push for more - got to be careful with these sales agents!