Possibility of a Mortgage (our situation)

circuit

We had £17k debt and couldn't get a mortgage without paying it off (note we already have a mortgage and the bank said we couldn't afford the house we're in!).

We are borrowing a lot less than you as well.

The fact you'd like to start a family won't change the lender's decision... you either have debt or you haven't. To avoid heartache, I would get the debt paid off.

ManOfKent_2

Thanks, but it would seem that we are in a different position than you were in (from looking at some of your old threads). Different salary, credit history, you were/are self employed? etc..

Hoping for some news from our broker soon and I will update.

BarleyGB

Not clear what the NRAM loan is, if you bought the flat(you’ve just sold) in 2007 why is there a negative equity loan against? Why did you take out such a loan withpunitive terms 12%!

I cant see that your position looks good in the current climate, lenders arebeing asked to tighten lending criteria via MMR rules, they’re looking at stress rates for affordability andGovernment HTB loans face the strictest criteria of all.

I cant help feeling there is something missing from the information youveprovided, your combined income was £70k (now £84k) yet you’ve £40k unsecuredcredit and had to resort to payday loans. Youre either being economical with the truth and something happened 3-4years ago or youre dangerously addicted to debt?

These are the sort of things a lender will wonder, affordability isn’t justsomething you show on a piece of paper its something you prove from pastperformance, can you show the accumulation of your £12k savings over say 6-12months, have you been saving at £1500+ per month? Im wondering as im struggling to reconcilehow repaying a £136k mortgage and moving into parents will save you £2800 permonth.

Lenders will want to see your last 6 months bank statements,they’ll be going over them with a fine tooth comb looking to validateexpenditure claims you make in an affordability statement, they may also lookat affordability claims against Office of National Statistics guidelines.

The biggest things that scream out (go against your application are) :

Proposal is 2.5 x existing (recently repaid) mortgage
NRAM loan at 12%
Payday loans (some lenders wont touch applicants with a history of paydaylending, even if paid on time)
High loan to income, government deposit scheme, history of debt/moneymanagement problems (unsecured debt and payday loans)

You may need to provide answers to a lender over the concerns ive raised.

Getting a mortgage isn’t a right, I think you need to have a cold hard look atyour financial situation, you should be looking to clear all the debts beforetaking on a large mortgage on HTB, in my view youre stretching yourself to themax and still talking about starting a family soon? How are you going to afford the unsecureddebt, the new mortgage if rates jump up, the cost of bringing up a family.

Now is an ideal time to set up your future give some thought whether the betterlong term solution would be to spend a year clearing down your debts while youhave an opportunity.

BarleyGB

ManOfKent wrote: »

Thanks...understand it would be best to tackle debt first and we will if it's needed to secure a mortgage - but we are in need of a house as we are not getting any younger and would like to start a family.

We don't want to have to stay with parents for too long!

You can see that youre in this situation due to debt?

Strange that presented with an opportunity to clear your unsecured debt within 6 months, that instead of doing this you want to take on yet more debt. Doesnt this situation, the predicument youre in, recent need for payday loans and all likelihood that youll struggle to get a mortgage tell you anything?

So when youre lumbered with the £250k+ mortgage, near £1000 per month unsecured loan payments, lease care payments. How are you going to afford to lose one income while you start a family?

circuit

ManOfKent wrote: »

Thanks, but it would seem that we are in a different position than you were in (from looking at some of your old threads). Different salary, credit history, you were/are self employed? etc..

Hoping for some news from our broker soon and I will update.

With respect, it sounds a bit like you're waiting for someone to tell you what you want to hear.

We are self employed, yes, but had just one late payment in 2010.
This was enough to get us rejected at Santander.
We had to pay off ALL debt to get accepted at Natwest.
Payday loans would have killed our application stone dead with every lender.

You need personal advice from a broker, regardless of anything else, but I think you also need to heed the advice of people on these boards. They are telling you things you don't want to hear, but they're trying to save you some hassle at the same time.