First Time Buyer feeling overwhelmed

TomCat666

Hello MSE,

Me and my wife have saved up our deposit to put towards our first owned home together.

We have £9000 and are looking at 5% deposit mortgage deals. There seem to be a few on the market, one with our building society, nationwide.

We noticed woolwich also offer (I believe barclays offer woolwich mortgages?) 5% mortgages and for a fixed rate of 2.99% which is better than nationwide. We don't bank through them so were wondering if they would likely take us on?

Neither of us have checked our credit scores, however neither of us have ever defaulted on a payment or had credit cards. We have obviously had bills in our names and contracts etc, would that give us a good credit score?

Any other tips and traps to look out for would be appreciated

Thanks

ACG

Banking with them will have some impact on your likely acceptance with them but its not a case of if you dont bank with them your on the back foot. Each case is taken on its own merits.

If you are unsure and want tailored advice and support it could be worth having a broker working for you. I dont mean that in a biased way but our job is not a case of finding the rate and thats it, we offer support and guidance along the way.

TomCat666

That's good news, I understand it is bad on your credit to apply to too many places for mortgages?

TomCat666

Also, Is it better to take the mortgage out over a shorter period or a slightly longer period and overpay? As naturally over the course of the mortgage circumstances can change and interest rates can rise etc?

ACG

You dont want to be applying multiple times.
Find a lender, apply and stick with it unless it gets declined.

As for term of the mortgage, it comes down to personal preference. I have spoken to countless people who want the ability to overpay - ask how many overpaid and its 0.

TomCat666

Thank you for your help

One last thing, when looking at how much we can borrow it seems having a child (dependant) reduces the amount we can borrow by around 12k. My wife is 3 weeks pregnant do we have to claim as a dependant?

ACG

Depends on the lender, questions asked etc and when you complete.

Dont forget you can use child benefit/tax credits with some lenders.

stator

Woolwich 95% mortgages are 5% or 4%, not 3%. The 5 year fix is 5% which is good, Nationwide 5 year fix is 5.19%

If buying the house will stretch your finances I would go with a longer term so that you can rebuild some cash savings asap in case of emergencies.

Alexis27

Neither of us have checked our credit scores, however neither of us have ever defaulted on a payment or had credit cards. We have obviously had bills in our names and contracts etc, would that give us a good credit score?

Nobody knows - you need to check.

You can think you have an unblemished score and for all you know someone has rifled through your bins, set up accounts in your names and left a trail of defaults all over your credit files.

Get a copy of your statutory report from Experian and check for free online at Noddle.

After that, go and see a broker. Tell him your situation and he will give you best estimate of how much you can borrow. Do not go about applying for Decisions in Principle and leave marks over your credit file.

amnblog

The 2.99% product you refer to is a speciality product requiring a capital commitment of 15%.

Barclays true 95% rates start at 3.99% which is still very good.

kingstreet

I thought Nationwide only offered 95% if you had a save to buy account, unless you were an existing mortgage borrower?