Worth finding a broker or keep renting?

easterbunny9

Would appreciate hearing from anyone who feels we may have a shot at getting a mortgage as if we wait much longer we are never going to be able to afford a house locally (only want a 2 bed, just really don't want to buy a flat)

Applicant 1 earns 33,500 with 3,300 quarterly annual bonus (last 3 years been paid every quarter) aged 31
Applicant 2 earns 29,978 with 3,500 bonus as above aged 30

Would love to be able to get around £285,000 with a deposit of around £16,500 but currently combined credit card debts of £14000 all on 0% and applicant 2 has car loan of £259 per month until October next year.

Both have HTB isas set up, one Virgin, one Nationwide. App 1 banks Natwest app 2 Barclays, I know both do Htb mortgage guarantee but have a feeling we are just over the income multiples if they don't include bonuses? Or would a normal 95% mortgage be possible? Currently renting and need to be out by end of July. Is it worth us trying our luck does anyone think? We are in a London Borough by the way... any views gratefully received

AnotherJoe

If you didn't have those credit card debts my back of a fag packet estimate says you'd just be OK.

But you do, so you are fooling yourself, you don't really have a deposit of £16,500, you actually have a deposit of £2,500 (which might just cover all the fees associated with buying a house) because you've borrowed the rest of "your deposit" on credit cards, which lenders don't generally like as it means you haven't really saved a deposit.

You could try a broker, but my guess is you'll find you need to pay off the credit card debts, then save for another 6 months to get your real deposit. Best chance might be you get lucky and find someone who will give you a mortgage dependent upon you paying off the credit cards prior to completing,is that possible?

There's no harm you seeing a broker anyway.

easterbunny9

Thanks AnotherJoe for responding... We would have the money separately for legal fees stamp duty etc, basically would have around £23,000 total. Paying off the cards in full wouldn't be possible before completing though we would be aiming to get them down as much as possible... With rent at £1350 a month it's been a real struggle to get them down much more than we already have done. Guess it's time to live like monks or possibly miss the boat altogether!

AnotherJoe

Note, I am not a broker, I'm just responding from a POV of life experience and helping the kids out recently with mortgages and what happened with them.

Look at your position this way, say you had no savings at all. Would you think it reasonable to then borrow £14k off a credit card and then say "look, I've just saved £14k for a deposit"?

That's exactly what you've done, just in a different order.

So, no harm in seeing a broker, but personally and non-professionally I reckon you are 6 months off. Which you probably knew anyway.

p.s. post an SOA in the debt free wannabee forum. But yes a year of living like monks is probably called for. There's a lot of stuff that people regard as some sort of human right these days that they factor in as necessities. Were you going on holiday this year? Do you have satellite TV? Do you eat out? Assuming all those three are true (where did those credit card debts arise from?), I wonder how much you'd save if you didn't do any of those for just one year?

cahillg81

Why push yourself to the absolute maximum on affordability? This is a problem with the market. too many folk want the most they can borrow and stretch themselves unnecessarily.

Why not purchase a flat even for a 2 - 3 year period get that Mortgage and then look at moving on, hopefully find somewhere initially that you can get some equity out of?

Myself and partner bought a place 18 months ago, we could have got around £250k but bought at £170k, we have spent around 10K doing the place up, and I had it valued last month and estate agent reckons we'd get £205k for a quick sale if happy to ride it out we could probably get £212 - 220K. With the equity, the lower monthly payments we have taken on we have replenished our savings and when we look at moving in 6 10 months we will comfortably be able to buy our dream house.

Small steps is best, especially for first time buyers.

Debtslayer

I would speak to a broker and see what they think as they are qualified to advise what your chances of getting a mortgage are.
The amount of debt will lower the amount you will be able to borrow quite significantly.