First time buyer help please

missmoose

Hi, I'm (hoping) to be a first time buyer within the next few months, but I have a few major questions.

My partner is contracted for 25 hours a week but consistently (since march when he moved departments) has worked 35 hours a week. I'm contracted 30 hours a week but on average (since February) is working 35 hours a week, would they lend to us biased on what we are contracted or biased on what we have been earning for the past 8/9 months?

How do I go about getting an AIP is it a soft or a hard search? Would I get one before looking at houses or once I found one that we quite like?

ATM my credit score is good but if I pay off my phone bill early it will boost it, I have the means to do so but would it be better to have a slightly better credit score or slightly less out going each month?

If we applied now would they take in to account that our out goings are increased due to spending on Christmas gifts or would they just see it our right as "excessive" spending?

Sorry there is so many questions, we don't know anyone who has bought a house in the last 10 years, both our parents have lived in their current houses for quite some time and things have changed so there not very helpful with the financial side of things.

JP1978

My only advice is to speak to a mortgage broker, he will advise on, or calm your nerves etc on the phone bill.

Note though that some brokers are paid by the client (you), others are paid once the mortgage is in place by the lender. Either way, choose one that has visibility of whole of market, not just a % of the lenders.

DCFC79

Maybe paying off the phone bill will increase your score but no 1 else can see it, the history is what lenders see.

glasgowdan

Personal spending like gifts isn't factored into affordability calculations.

"In a mortgage affordability interview you can expect to be asked how much you spend on:

Utilities (gas, electricity and water bills)
TV and phone packages
Council tax
Insurance (life, home, car, pet etc.)
Essential travel (such as getting to work)
Housekeeping (e.g. food, toiletries etc)
Any maintenance for a child or spouse
School or college fees
Regular saving and investment contributions"

missmoose

Maybe paying off the phone bill will increase your score but no 1 else can see it, the history is what lenders see.

When I checked my credit score it said that I had no bills paid off in full which had dropped my credit score. My car was taken out over a 5 year period and I've never had a credit card because I never needed one. So if I paid off my phone in full before the contract is up would that not show in my credit history of me being able to pay off a bill fully before the deadline?

missmoose

Is a broker necessary? I don't want to spend money on something we don't need?
Is a mortgage asvisor the same as a broker?

JP1978

missmoose wrote: »

Is a broker necessary? I don't want to spend money on something we don't need?
Is a mortgage asvisor the same as a broker?

Broker/Adviser - same thing.

You dont need to spend money, we just moved and re-mortgaged and not paid a penny to a broker - the bank that we have the mortgage from pays him. Obviously when making the initial phone call to some firms, ask the question on who pays the fee's - you or the bank.

Brokers do tend to get access to better deals than the general public do and if you went to one bank, they can only sell their product, a broker can sell a product from any bank or institution. More importantly, they will look at your circumstances and advise on a lender whose lending criteria fits.

missmoose

We have a mortgage adviser in the family so might be worth chatting to them then, even though we really don't want to.

Has anyone got any knowledge on the help to buy ISA's?
If we have £5000 in out HTB ISAS the gov will give us £1250 to our mortgage, when looking at how much we can/need to borrow do we put that in with the deposit amount or take it off of the property value or forget about it completely?
I hope that made sense?

haf1

It does. You deduct the ISA amount from the full house price due at completion, not from any deposits due.

https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/

When you are close to buying your first home, you will need to instruct your solicitor or conveyancer to apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home. The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home.

missmoose

To be honest it still doesn't make sense to me
So if we see a house for £100,000 and we get it for that price.
We put £5000 as the deposit if that's what we have saved,
Then for the property value would we put 95,000 as what we need to borrow OR 93,750 because the Government will pay 1,250 .
Like at what point do they pay the money ?
Is it after we have the mortgage do they just pay a bit of it off for us
OR
When we put the deposit down do they go to the bank here's £1250 on top of that

I don't know if I'm just stupid or if they've not made it very clear, I cant get my head around that bit