FTB Self Cert Advice :-)

FTB07

Hi,

Thanks for reading this post. We are both FTB looking to buy a new build in the next few weeks. I spoke to a mortgage broker yesterday briefly who said there shouldn't be any problems in obtaining the mortgage we need, however as we didn't go into full credit history details I'm still worried and don't want to get my hopes up to much. Our situation is:

Both Self-employed
Income £36k each (£72k combined)
Looking for a 95% self cert mortgage for £275k
One unsecured loan, haven't missed any payments.
Have no CCJs etc

Both have several missed credit card payments because we stupidly didn't put these on direct debit and missed the payment dates. These credit cards have all been paid off completely but only in the last week.

The only problem I can see is the missed credit card payments. My credit rating is fair and my bf's is good. Is it still possible to obtain a mortgage with missing payments quite frequently? Our unsecured loan has been paid off in full and on time every month.

Any advise would be greatly appreciated.

A very worried FTB.

FTB07

homer_j_3

Is the deposit self funding or is it gifted from the builder?

How long have you been self employed and how many years accounts do you have?

Did your adviser not go through any options with you?

FTB07

Hi,

Thanks for your reply. The advisor did go through various mortgage options however as we don't have a fixed price on the new build we didn't go into full blown details and we very briefly covered credit history, which I am now worried about.

The deposit is self funded, no builders help unfortunately.

I have been self-employed for 2 years and bf has been self-employed for 6 months. The business has grown really well in the last 10 months or so, therefore my accounts do not reflect my current and anticipated income. The broker said we would need no proof of income. At the most we would need an accountants letter.

Having looked at the criteria of the mortgages the broker suggested it looks like we are limited to the amount we can borrow because we are a first time buyer and also limited to 2 late payments in the last 12 months. Is this correct?

Many thanks

FTB07

homer_j_3

what you have to understand is the new builds are often overpriced and you pay a premium for being the 1st person being in there.

When you start looking, you will probably come across deposits paid or other incentives which are "free" (or already accounted for in the price.) So it may be that if you find one with a builders deposit and your depost, you have a 10% deposit, which may open up some other options. I use the word may very loosely here though.

If you have to buy now then I would maybe get some firm figures and let your broker know these so they can give you some firm figures back by return as its better to know exactly what you are getting before the emotional attachment of your potential new home kicks in.

FTB07

Thanks Homer_J,

I'll go back to the broker on Monday and hopefully have more accurate figures.

Thank you for your advice on the incentives, I'll certainly ask around for these. Where we are buying (North East Scotland) is definately a sellers market, but that goes the same for everywhere at the moment I guess.

My big worry is the late payments with the credit cards and also the FTB mortgage limit. Do you think this will be a big problem for us or are there options that could avoid this?

Thanks

FTB07

homer_j_3

You can only see what is on your experian file. The only way you are going to improve your situation is to demonstrate that you are no longer forgetful about your credit commitments. This is done by letting time pass before you apply.

I was going to suggest that it may work to your advantage to wait 12 months but the market seems to be different where you are to where I am. The market is cooling and there are many houses not selling because they are simply unaffordable or overpriced.

My advice is that if its going to cost you more in a mortgage payment to a rental payment then you should think about renting, adding to your deposit and also giving your credit a rest. However, I know that when you want something, this is harder said than done - I am good at being sensible for others lol!!!

FTB limit - not sure what you mean by this but your ability to borrow is limited by your earnings. 5% Deposits on self-cert reduce the lenders available. FTB status may lower again. Credit status lowers again. To open up availability, you need to have bigger deposit really and to try and get 12 months without any late or missed payments.

FTB07

Thanks Homer_J. Unforunately, where we are, people queue for the release of new builds and with the price over double from this time last year, we just can't wait any longer. Hopefully, with the credit paid off and no missed loan payments or any other credit problems we will get something. Just going to have to keep everything crossed. Thank you for your time and advice. It is greatly appreciated.

FTB07