First Time Buyer - Large Deposit

sgx.saint

Hello,

Looking for some advice or an educated guess regarding my current situation.

I am a first time buyer looking at buying a property around the £100K mark.

I have a below average credit history according to the generic scores on the credit websites such as Noodle and Experian, but I have no defaults, CCJ or arrears.

I did have issues several years ago (more than eight years) but this is all cleared from my file now.

I bank with Nationwide (FlexPlus) and have been a customer for just under two years.

I have been gifted a £60K deposit to purchase a house, so would only be looking for a £40K mortgage.

I know that I am able to repay the monthly repayments easily after checking on various mortgage calculators not to mention the fact I pay far more in private rented accommodation currently than I would in my own property with a £40K mortgage.

In my situation, with having such a large deposit amount, would approaching a high street lender such as my bank (Nationwide) likely provide me with a successful outcome?

Or would I be better looking elsewhere such as broker?

I am hoping the high deposit amount will stand me in a good position but as I've never been through this process before then I would be very grateful of some input.

amnblog

You will see on many threads on this forum that we brokers advise you that 'credit scores' stated on Noodle, Experian, and Equifax make NO difference to a Lender's decision.


It is the content of the file that is the important information.


We cannot say how easy it is for you to obtain funding as we don't know your income, nor whether the gift will be acceptable to any particular lender.


I always recommend using a broker - I would because every day I see the benefits to borrowers of using our team.

sgx.saint

amnblog wrote: »

You will see on many threads on this forum that we brokers advise you that 'credit scores' stated on Noodle, Experian, and Equifax make NO difference to a Lender's decision.


It is the content of the file that is the important information.


We cannot say how easy it is for you to obtain funding as we don't know your income, nor whether the gift will be acceptable to any particular lender.


I always recommend using a broker - I would because every day I see the benefits to borrowers of using our team.

Thanks for the reply.

I have an income of £23,500 and have worked for the same company for nearly seven years.

The £60K gift is already in my account, so it is my money, so I don't expect that there would be any issue over a lender accepting it.

A broker I assume will take a commission from any arrangement as opposed to if I was to go direct to a specific lender?

What are the advantageous to using a broker, in your opinion?

Also, one other way this could be done, would be for the property to be outright by my mother then gifted to me so that I own the entire property.

If I was to then, say 3 to 6 months later take out a small mortgage, say around £30K, would this stand a better chance of being approved considering it would be secure against a property I own outright?

nubbins

Personally I would not get a mortgage without using a broker, I find its a much smoother, less hassle process especially when you do not have to deal with bank/building society/call centre staff. With a broker any issues that arise can usually be sorted quickly whereas dealing with a branch or call centre can be extremely tedious and time consuming.

I think brokers get approx 0.35% from the lender so you may find it hard to find one that does not charge you fee due to the low commission they will get from a 40k mortgage.

sgx.saint

nubbins wrote: »

Personally I would not get a mortgage without using a broker, I find its a much smoother, less hassle process especially when you do not have to deal with bank/building society/call centre staff. With a broker any issues that arise can usually be sorted quickly whereas dealing with a branch or call centre can be extremely tedious and time consuming.

I think brokers get approx 0.35% from the lender so you may find it hard to find one that does not charge you fee due to the low commission they will get from a 40k mortgage.

Thanks for the reply.

Are there any particular brokers that I should consider or that are recommended for my circumstance?

Also, typically, if a lender was to agree a mortgage, how long is that decision valid for?

shaneshaneshane

Offers usually last 6 months

sgx.saint

shaneshaneshane wrote: »

Offers usually last 6 months

Thanks.

If I was to suffer a knock back from a lender or broker, how long between applications is recommended, three months?

I am leaning towards the use of a broker, so would appreciate any recommendations.

With me having such a large deposit, am I right in thinking that a potential lender will view any application as being less risky as a result?

Over nine years ago I had debt issues and received defaults, these have since cleared and my credit file is now clear, however I do still worry about these things.

kingstreet

You don't have to leave a gap.

If you are declined by one lender, there is nothing to stop you applying to another.

By using a broker, you would expect to avoid wasted speculative applications as we wouldn't submit the application unless 100% sure of lender acceptance.

sgx.saint

kingstreet wrote: »

You don't have to leave a gap.

If you are declined by one lender, there is nothing to stop you applying to another.

By using a broker, you would expect to avoid wasted speculative applications as we wouldn't submit the application unless 100% sure of lender acceptance.

I see, I only ask as the MSE guide says not to apply again as it can make things worse.

I mentioned the use of a broker to my mother but she isn't keen and would prefer go direct to a lender, such as my own bank.

I guess convincing her will fall down to the additional costs for using a broker.

kingstreet

Running up and down the high street having speculative credit searches done could be damaging.

A broker's targeted approach based on research and "placing" the case in the first place wouldn't be.

sgx.saint

kingstreet wrote: »

Running up and down the high street having speculative credit searches done could be damaging.

A broker's targeted approach based on research and "placing" the case in the first place wouldn't be.

I would tend to agree, the fee that a broker applies, where is this normally recouped?

On the mortgage interest rate, as part of the overall mortgage or elsewhere?