FTB - Joint Application - Advice

Simon.Khadija

Hi all,

My partner and I are currently living in a rented house, which the landlord has decided to sell. We discussed before that if the landlord ever decided to sell then we would be interested, so now that point has come. The estate agent has told the landlord we are looking to make an offer, and they aren't arranging any viewings until we have decided if we want to buy it or not.

We have a 5% deposit saved.

I earn £34,000 and my partner is currently on maternity leave but she earns £26,500. (Returning to work in May)

Partners Outstanding Debts

Loan: £15,000 (£320 a month)
Credit Card: £4000 (interest free balance transfer)

My Outstanding Debts

Credit Card: £2000 (interest free balance transfer)


I had a Default removed last week by Lloyds after disputing it, that has gone from my credit files. But I have a couple of late payment markers on two accounts (these are now 18-24 months old).

The house is priced at £152,000, our deposit is £7600 so we would be looking to borrow £144,400 which is around 2.3 x our income.

I'm after a little bit of feedback on what people think to our situation.

STG_2015

I would first see what you can borrow, we are in the process with Nationwide they have online calculators. Also check out your credit score and report with Experian, Nationwide made a check at DIP with me and another at full application but I don't think they check twice with everyone

Simon11

I don't think that you would be able to afford this house and ideally you need 10% deposit (£15k+) to get a poor rate. With better rates for 20%+ onwards.

With the amount of debt that has been aquired, it seems that you are living out of your means and this won't be resolved with purchasing a property.

With your wife going on maternity leave, your income will drop and lenders may see that as a risk, as she may not return afterwards, thus a bigger drop in income.

Thrugelmir

Your deposit doesn't appear saved but is represented by the amount you owe on 0% balance transfers.

£21k of debt would a concern for any lender. Your past 6 years of credit history will also reveal an insight as to how you've managed your finances to a potential lender.

Simon.Khadija

Simon11 wrote: »

I don't think that you would be able to afford this house and ideally you need 10% deposit (£15k+) to get a poor rate. With better rates for 20%+ onwards.

With the amount of debt that has been aquired, it seems that you are living out of your means and this won't be resolved with purchasing a property.

With your wife going on maternity leave, your income will drop and lenders may see that as a risk, as she may not return afterwards, thus a bigger drop in income.

My wife is returning to work, the maternity leave is nearing the end.

We aren't living out of our means, the rent we pay is around the same amount as what the mortgage would be.

Thrugelmir wrote: »

Your deposit doesn't appear saved but is represented by the amount you owe on 0% balance transfers.

£21k of debt would a concern for any lender. Your past 6 years of credit history will also reveal an insight as to how you've managed your finances to a potential lender.

The deposit has nothing to do with the balance transfers. We realised we were paying extortionate rates on our old cards so we transferred to 24 month 0% cards to pay them off.
Our past 6 years have been good, all greens. Except from a couple of late payments of mine 18-24 months ago.

Jhoney_2

Not sure it's allowed, but can you get a mortgage on just your income? It may be that classing your wife as a dependent ( ie now at least 2 dependants with baby) you mitigate the debt your wife has.

Just worth a look, I haven't any knowledge or experience to advise.

Right now, you have 21k debt - 7.5k deposit = 13.5k debt and potentially two dependants (on paper as it were).

As posted above, play with the calculators and perhaps see a broker.

All the best.