How bad is having limited credit history before applying for a mortgage?

HappyMJ

Blibble wrote: »

Hi HappyMJ,

Whilst that sounds lovely in principle, the issue is the "decent deposit" bit! We're first time buyers, 12 months out of university, and have only just hit 90% LTV (I realise there is equity loan at £20% which goes towards it additionally).

You have a 10% deposit. That's a good start. A very good start. Can you show 12 months worth of statements to a broker showing a gradual increase in your savings account?

Have you got yourself a job earning at your full capacity yet? If you wait another year you might be able to get a promotion. After working for a year you'll now have one year of work experience and be more valuable to an employer. That higher salary can enable you to borrow more....although you would need more deposit as well.

Just as an aside. Renting isn't that much more expensive than buying a home so I would rent until your "forever" home appears on the market. I wouldn't buy a small apartment which you may need to move out of if you create a family.

Blibble wrote: »

Hi MortgageMamma,

Thank you so much! I wasn't requesting a specific broker's details, more just a general nod as to whether it would be a good idea or not.

I'll certainly investigate local brokers over the coming days - we've budgeted £5000 or so for fees as recommended on this forum several times, and we're ex-chain so are hoping to come under that. I might shop around see if I can get an idea on prices.

Thanks again!

Is the £5,000 on top of your deposit? I paid £1,500 in total including stamp duty when I purchased my house. A fee free mortgage deal can save you a lot. Interest rate was higher though.

MortgageMamma

Blibble wrote: »

Hi MortgageMamma,

Thank you so much! I wasn't requesting a specific broker's details, more just a general nod as to whether it would be a good idea or not.

I'll certainly investigate local brokers over the coming days - we've budgeted £5000 or so for fees as recommended on this forum several times, and we're ex-chain so are hoping to come under that. I might shop around see if I can get an idea on prices.

Thanks again!

If you want some help looking for brokers, I can direct you to some useful websites.


THIS ONE WILL FIND YOU A LOCAL BROKER https://findamortgagebroker.co.uk/


THIS ONE WILL FIND YOU A LOCAL BROKER WITH TESTIMONIALS WWW.VOUCHEDFOR.CO.UK


THIS ONE WILL FIND YOU A LOCAL BROKER WWW.CHERRYFIND.CO.UK


THIS ONE WILL FIND YOU A BROKER OR INDEPENDENT FINANCIAL ADVISER WWW.UNBIASED.CO.UK


Just one final note - many brokers work over the phone/internet/email these days so don't feel you have to take valuable time out of your day to attend a lengthy meeting as you do with a bank. The process is very straightforward - there are also large "national" firms of telephone based brokers you could use.


Good luck with the purchase

MM

JimmyTheWig

MortgageMamma wrote: »

Unfortunately we are not allowed to recommend other brokers in this forum its against the rules.

I think they meant would you recommend that they use a broker, rather than can you recommend a specific one...

Blibble

Hi HappyMJ,

I'll have 12 months worth of statements next month, as graduated in June and found employment in August '15. It is minimum wage work (insurance call centre staff), however I enjoy what I do and as it's a fairly high turnover rate I'm secure in that role and relatively advanced for the time I've been there.

To digress a little, we always said that we wouldn't look to buy a flat - when we made the decision to purchase property together it was always going to be a long-term deal, and we're confident we could make it work obviously. The property we're looking at is a three-bed new-build (before anybody comments, I've probably spent a week's worth non-stop reading up on options before agreeing to this!*), and is one we'd look at being in for 10-15+ years so certainly not one we're viewing as an investment. In light of Brexit etc. etc., we've decided we want to get cracking on it now before HTB is pulled - everything seems to uncertain in the near future so we've decided we're going to make a move on it sooner rather than later.

*Disclaimer - a week's worth non-stop means 160+ hours, not that I started looking at it last Wednesday ...

kingstreet

Blibble wrote: »

Whilst that sounds lovely in principle, the issue is the "decent deposit" bit! We're first time buyers, 12 months out of university, and have only just hit 90% LTV (I realise there is equity loan at £20% which goes towards it additionally).

Equity loan?

You buying a newbuild?

If not, you are confusing the schemes;-

https://www.helptobuy.gov.uk

when the site is up and running again.

Blibble

Hi kingstreet,

Yep, it is a new-build, for all its sins!