Wasting time applying for mortgage?

AlphaGrills

Hi,

My wife and I have been looking for a house since March when we saw Natwest and got told that based on a couple of details I could have a mortgage up to 160k. She didn't say I couldn't have more, but I don't really want to stretch ourselves to more.
Anyway, last week we had an offer accepted for a 145k house and have made our appointment for a mortgage application. I've been trying to tidy our experian and equifax accounts for the past few months but having now looked at the new mortgage affordability criteria I'm a bit worried that I'm wasting my time.
We are looking to use HTB with £7250 deposit and I have just over 13k in the bank for this. I earn just over 40k, my wife receives child benefit of about 2k per year. Our current rent is £650 per month and the mortgage I am looking at is about £830. My concern is the amount of incidental purchases on things like music, dvds, online computer game purchases, trips to tesco to grab a snack. I think there are many and they add up.
Aside from that, we don't have gym memberships, child care, child maintenance, we don't go to hairdressers, don't have sky, etc. I aim to save around 400-500 per month for the deposit and in the past 3 months I did it in month 1, failed in month 2 because I had to pay for my car to be repaired (£370) and had around £700 at the end of month 3. It's just that now I've seen how people are cancelling all of their outgoings and living like monks to get through the mortgage approvals that I'm now thinking I have no chance.
Another possible oddity is that I've had a double payrise over the 3 months. I earned 37800 in March (2270), had a bonus payment in April (2470) and then had a yearly performance increase plus an "inline promotion" to just over 40k in May (2440). These values are net after pension, which the company take out. We're expecting to lose our tax credits this year, but also have a pay rise so I'm thinking we'll get about £130 per month extra in the coming year.

So, I guess I have 3 questions:
1, After seeing the mortage advisor, how long is it until we know if it's gone through? Is it the same day or do we wait?
2, How much damage will getting refused do to our chances of getting a mortgage in future? Will we be written off for 3 months, 6 months, a year?
3, Based on this, would we be better to pull out of the purchase, live like monks and look for something in a few months?

Thanks

AlphaGrills

If it makes any difference, My Equifax and Experian are Excellent. Her Experian is Excellent but Equifax is Fair.

ACG

1) A Decision in principle will usually come back the same day. However that is just checking your credit. An actual offer can take anywhere from a week to 6 months. Generally speaking its the shorter end. They may question transactions but in the main a lot of companies use figures for food privded by the ONS rather than what is actually on your bank statement.

2) In reality very little. You will have had a credit search and thats about it really. If you do get declined, speak to an actual broker (im assuming the person you are speaking to is a bank advisor rather than an actual advisor?)

3) I dont think so no. If it declines then you can live like monks.

Kristina80

I would not be too worried. We applied for a Natwest mortgage and they use national averages rather than actuals. The same with Halifax (we also applied for Halifax got accepted but survey was below offer so we went with Natwest). The press is really scaring people post MMR but the process with both Halifax and Natwest could not have been easier - no silly questions at all. Didn't even have to provide bank statements as our credit rating is excellent.

spidereyes

As above, ignore all the media hype.
Natwest's mortgage questions have not really changed since pre mmr, infact only 4 new questions have been added.

Only things they want to know in addition to the standard application ;
Are there any loans or other commitments not yet due, which will become payable during the mortgage?
Are there any other commitments that are out of the ordinary e.g. career-related qualifications or leasehold/ground rent charges.
Do you have any plans for the property which will affect the ability to pay the mortgage?
Are there any personal changes that will affect the ability to pay the mortgage e.g. change to job, changes to income or expenditure, changes to profits or family circumstances? - we said yes to this question as OH is self employed and advised that our earnings were expecting to be more for the following year, the mortgage advisor just made a full note on the application and put down the figure we expected to make for the forthcoming year.

We had a meeting with Natwest on the 9th may for the full application, we received our formal mortgage offer yesterday!

AlphaGrills

Thanks for these answers. I'm feeling a little better.
I have to say I'm finding the whole thing a bit stressful.

• I don't trust salesmen anyway, and EAs seem a little bit slimier than most.
• The mortgage process is a pain.
• We've gone for a house that's a little bit neglected, but we can live with for now, to save money and we'll do stuff in the future if and when needed/wanted.

ACG

Speak to a broker who doesnt work for the estate agents?

Theyre employed by you so will only be working to your best interests.

Thrugelmir

AlphaGrills wrote: »

My concern is the amount of incidental purchases on things like music, dvds, online computer game purchases, trips to tesco to grab a snack. I think there are many and they add up.

Then there's no need to live like monks. Just think before you spend.

Rmphotography

AlphaGrills wrote: »

Hi,


So, I guess I have 3 questions:
1, After seeing the mortage advisor, how long is it until we know if it's gone through? Is it the same day or do we wait?

We had our agreement in principle the same day (Monday) and valuation on the property was booked the next day (Tuesday) that took place on the Friday that week. We received our formal offer via phone on Tuesday the following week and the paperwork arrived on Thursday.
2, How much damage will getting refused do to our chances of getting a mortgage in future? Will we be written off for 3 months, 6 months, a year?
We originally applied to santander (big mistake!!) and there were records of this on our credit file. Didn't bother Halifax in the slightest although we weren't rejected, we just lost patience after 9 weeks of not hearing anything.
3, Based on this, would we be better to pull out of the purchase, live like monks and look for something in a few months?
No not at all, we had a lot of one - off incoming and outgoings in the previous three months and thought this would harm us, we had ppi refunds and motorbike sales coming in and purchasing of new furniture for the house going out. They look at ons figures at Halifax. Our new mortgage payments are going to be about 1/3 of our combined income after tax etc so if you're are about this or less I wouldn't panic too much.
Thanks

Hope the answers above from our recent experience help you out

AlphaGrills

Thrugelmir wrote: »

Then there's no need to live like monks. Just think before you spend.

Yeah, that's true really. We don't do many of the other things to entertain ourselves though. We don't go to the pub, don't go to the gym, don't have sky tv (have netflix though), don't get our haircut (I grow long then shave it, once every year maybe and my wife's mum is a hairdresser), rarely buy ourselves clothes and shoes other than for the children (I buy 1 pair every 2 years).

Also, will my wife having a Fair on equifax be a problem? She isn't directly funding the mortgage and experian says Excellent. There are no bad marks, just not enough positives as far as we can tell. I have excellent on both.