Is it even worth trying?

mplunk

Hi,

Can someone please help me to get my head around if we've got a chance or may as well give up now...
Offer accepted on a house 250,000
Deposit 15,000 - gifted from my mum (94%LTV)
Salary1 45K, Salary2 28K, joint extra income 3.5K a year.
Joint outstanding credit card balances 9,600
On salary1 also a loan, outstanding 5,500 (monthly 170)
On salary2 car lease payments monthly 212
1 Child, both salaries have max childcare vouchers coming out (243pm) and on salary1 360pm DD to the nursery
Salary2 also has 2500 overdraft, always in use (more of a habit)

Problems: Salary1 only was added to electoral roll 1 month ago (wasn't a Brit before) and only one credit agency picked up the registration so far;
both have 1 late payment each, 1 in 2009 for orange phone bill and another in 2011 for a now closed credit card

Initially went to NatWest (most of accounts with them) who gave us AIP for 290K!!! We thought it was a bit ambitious so went for much lower.

Spoke to L&C brokers, who after taking all the details said he can't find anyone, who would give 235 needed to us... apparently it's the affordability issue.
When I use NatWest and for instance Yorkshire calculators they both "give" us enough... Yorkshire calculator is pretty extensive, asking for loads of info.

Basically, is it even worth us applying and going through much palava if no one will touch with a barge pole?

I always had a feeling that we are in a good financial situation, yeah few credit cards here and there, all is getting paid and not being used anymore, credit scores look good, my husband's is excellent, mine not so much (fair) without electoral roll before but I am now on it. My mum is giving us the deposit, so we were like yay let's get a house! (looks like not though)

Dave_Ham

I would think this is incredibly tight, but probably enough to go at.

L&C deal with the masses and are fee free with you potentially getting the most or least experienced adviser who happens to pick up the phone.

I would suspect if you approach another broker (that may charge a fee) based upon experience you will be optimising your chances.

Good luck

mplunk

Thanks Dave Ham for the reply! What you reckon is more of problem? 2 old late payments? outstanding debt? overdraft? no electoral roll history?
I am concerned that if we get declined, which looks like a likely outcome, we won't even be told why... and I still would like to know what to concentrate to "work" on for the future
Also, how damaging for the credit score it will be to have a search done and get declined?

Dave_Ham

Virtually impossible to say, although I doubt it would be the credit file moreover affordability or credit score due to electoral roll.


The childcare costs are higher than average and with the unsecured debt and car lease, I suspect this is the issue.


I would go manual underwriting at 95% loan to value, or a lender known to use the one credit file that electoral roll has been updated for.


Either way likely to require a broker, or maybe a different one.


All the best

mplunk

Thanks once again! I have a few phone calls scheduled tomorrow with brokers to see if anyone can help. The problem then though no clue how to select, which of them to go with I will be asking them then for lenders with manual underwriting and I also looked up all of them deal with Kensington - my understanding they are specialist mortgage provider. Anyway will give updates if anyone else is reading and it might be helpful.
I'm at least hoping to go through an application and if rejected to have an indication of why

R_P_W

What is your living situation now? Do you rent or live with parents?

How much do you have saved for stamp duty, fees, furnishing and the other expenses that can crop up buying a house?

How have you built up your debt? Personally even if I could get the mortgage. I would be asking myself whether I should take it.

Don't take this the wrong way but you are not in a good financial position. Unless you have savings you have not mentioned how would you cope on one income?

mplunk

R P W thanks for pitching in. We have all the money needed for all extra fees, stamp duty etc. How we built our debt... in all fairness I got no idea (I know it's not funny). The loan was actually for my mum, who's giving me 200 a month to cover monthly payments but I obviously can't tell it to the lender. I guess few years back when I was on maternity leave, when my salary stopped we used some of the credit cards, used them few times since then - we haven't touched them for ages now, just paying off and swapping balances for 0% now and again.

We're renting now and our rent 1300 a month, the payments for mortgage we wanted would have been very similar if not less. We're quite comfortably paying everything and would have been able to pay more. But I guess with these new affordability rules, still won't be getting anywhere...

Well if we're told more or less why the rejection, we'll work on fixing it. I know we should have started looking into what requires for a mortgage ages ago and by now maybe would have sorted worst problems, so no one's fault but our own but live and learn

I still want to try though, what if...

mplunk

Oh I do receive commission quite regularly and yearly bonus (last year's p60 had nearly 10K on top of salary) so we have a joint account where we have about 2K sitting at any point, which we're dipping into if needed for anything extra like holidays or like deposit for a leased car etc Yeah I know we should be more conscious and paying off credit cards with commissions rather than anything else, guess this is the wake up call to start doing it

GMS

mplunk wrote: »

I also looked up all of them deal with Kensington - my understanding they are specialist mortgage provider.

They dont do 95%.

Thrugelmir

mplunk wrote: »

I always had a feeling that we are in a good financial situation, yeah few credit cards here and there, all is getting paid and not being used anymore, credit scores look good,

Lenders will score you themselves. Debt and overdraft usage will be negatives. If buying a property is your aim. Then now is the time to spring clean your finances. Cut the waste and focus on paying down the debt.

mplunk

Thanks Thrugelmir! That's the plan now, to sort our.... out. Just shame we found something we like now how bad will it be to have a mortgage search on file? Will the lenders 6 months down the line see the search and figure it was declined?