FTB Have we ruined our chances of Mortgage?

Angie_B

You definitely need a broker for this.

A £5k 'deposit' of which £3k is essentially borrowed on credit card is not going to be easy. I would say you need to clear the debts and get saving before you buy anywhere. Have you money for fees? Moving costs? Emergencies? What happens if you move in and the boiler breaks the next week?

GoldenShadow

set wrote: »

Thanks, hope so. total debt is OH 1940 cc and me 1050 cc that's it, don't owe anything else. Absolutely nothing else on credit file other than the cc application few weeks ago.

Just need to find a ruddy flat now!

The bit in bold from this post really struck me. The problem is, like others have said, deduct 3K from 5K and you've basically got a 2K deposit, so 2% at the moment.

OH and I have a 10% deposit (+ enough for fees) and absolutely no balances on anything, not CCs, not store accounts, no loans, absolutely nothing. The smaller deposit you have, the more scrupulous lenders seem to be. OH took out a loan for a car about 3-4 years ago and we always intended to pay it back long before we applied for a mortgage. At the end of the day, you have access to that money, but it isn't yours in the sense that it is borrowed and does have to be paid back.

So many people (including my friends) have CCs near limits and seem to think its normal, maybe it is, but it seems to confuse what you might or might not be able to get mortgage wise an awful lot so seems much better to wipe the debt and start again.

set

will try getting hold of the broker as he said if our debt combined are only £3K we should be ok, otherwise we never would have started looking to buy otherwise. Yes we will have money for fees. luckily my in laws will pay for this for us. They will also take care of anything major that breaks down in the first year. We are very greatful for this. They did the same with OH sister when she moved so want to do the same for us.

Just to add, when I say anything major, im talking boiler and the like. Not anything like the roof falling down :-)

set

GoldenShadow wrote: »

The bit in bold from this post really struck me. The problem is, like others have said, deduct 3K from 5K and you've basically got a 2K deposit, so 2% at the moment.

OH and I have a 10% deposit (+ enough for fees) and absolutely no balances on anything, not CCs, not store accounts, no loans, absolutely nothing. The smaller deposit you have, the more scrupulous lenders seem to be. OH took out a loan for a car about 3-4 years ago and we always intended to pay it back long before we applied for a mortgage. At the end of the day, you have access to that money, but it isn't yours in the sense that it is borrowed and does have to be paid back.

So many people (including my friends) have CCs near limits and seem to think its normal, maybe it is, but it seems to confuse what you might or might not be able to get mortgage wise an awful lot so seems much better to wipe the debt and start again.[/QUOTE

Our credit card has never been anywhere near the limit before. We just did a balance transfer so we didnt have to pay interest. The card was cut up as soon as we received as we never intented to buy things with it. We asked the broker if we should clear credit card before we start applying. He asked how much we owe and we said combined £3K he said no with it being such a small amount (I dont think £3k is small!) it wont matter. Like I said we wouldnt have spoken to the broker any further if he said clear cc first. We were under the impression you had to clear loans or cc's before you got a mortgage. :-/

ViolaLass

Lenders generally won't like that you're in debt and didn't save the deposit or fees yourself.

set

We have £5k saved in an isa. Like I said we asked the mortgage broker from L & C do we need to pay off cc first, he said no as its only a small amount. Will try and get hold of him today.

Malmo

If the debt to income ratio is high, then the debt may be perceived as relatively large to lenders, hence the impact on affordability is significant. We don't know your income from this thread, so cannot comment on the relative size of the debt. A debt of 3k on an income of say 20K is very different to the same debt on an income of 100k.

That you will need to rely on family to cover fees and any big expenses in the first year of ownership suggests that you need a more robust savings and debt servicing strategy to buy a property.