First Time Buyer - Shared Ownership & Mortgage Application Worries

streetlovin

Hello all,

First of all, sorry for a lengthy post. I am 24 and currently applying for a mortgage for a shared ownership property. Details are below:

Broker: L & C
Lender: Leeds Building Society
Full Price: £138k
Share to be purchased: 55%
Share value: £75900
Deposit: £6000
Mortgage amount: £69900

My income is £22k, having been constantly employed since graduated in 2014 with each time the salary got increased. This current job (third one) is permanent and done probation period.

Currently have credit card debt of £740 which will be paid off in February or reduced to less than £200. But will be erased before I start taking out mortgage. I have this account for over 4 years and there were 3 missed payments (all less than 1 month late) back in 2014 during the transition from being a student to getting job.... will they take these into account?

I have had 4 settled loans - 2 phones, 1 credit card and 1 secured loan for my professional qualification of over £2k with no missed payments. Other than the missed payments above I have NO other record of being late.

Currently paying for laptop £44 a month, a car £88 a month. The car was bought three weeks ago and a hard credit search was done which reduced my score from 903 to 854 so it is now 'Fair' rather than 'Good'. But there are no negative score records according to the report. 69 Soft searches were done in the past 12 month (about 19 in Jan 2017) due to applying for car finance and laptop... laptop finance was taken out 7 months ago. I am an idiot...

I have over draft limit of £1500. The past three months I used overdraft during christmas but paid it off 2 days later and when i bought a car i went under overdraft by £200 to pay my insurance in full but paid this off the day after when I got paid. The overdraft is 0% interest that's why I did it. My issue is that I tend to leave my balance on current account quite low because when I get paid I pay all the bills and moved % of my income to saving account straight away so that anything that is left on my current account is for me to splash. If I end up having to use overdraft it will always be because I get paid the day/2 days after. Starting to really regret doing this now...It is never because I have no money but mostly because I didn't want to move my saving back into current account otherwise it could become a habit....

My question is...the missed payments and hard search that was done three weeks ago and the record of using over draft in the past month + multiple soft searches in the past 12 months.... are these too much that will cause them to instantly decline my mortgage?

I am at the stage where an AIP has been accepted and full application has been sent to Leeds along with all other documents. Just waiting for them to come back with assessment result... but I checked my credit report, found the ugly missed payments and now I am struggling to sleep

I'd liek to think I am overeacting when I compare my situation to many people on here who are applying for mortgage, but it would be nice to know if the above information are so bad that it is not even worth me applying fo rmortgage right now so i can stop and start trying in 6-7 months time.

Many thanks
Streetlovin

csgohan4

Did L+C know about the missed payments before submission???

streetlovin

Hi, They didnt and neither did i. I think it probably happened when I paid 1 day before the deadline and then payment didnt go through in time.. I only know about this through credit report. On the application form it asked "have you ever been behind in any financial commitment" and if i said yes i had to declare anything that was missed within the last 3 months and then 12 months. As far as i know at time of application, I didnt miss anything. I have dropped my broker an email...they only recieved everything yesterdayso hopefully they havent sent and get it corrected in time.

csgohan4

That is quite worrying, but in some sense not surprising. A free conveyor belt broker who don't have customer service in mind nor quality and bank on quantity of cases for their financial model.


A competent broker would want to see their client's credit files from all the CRA'S before issuing an AIP or Full application. The fact they didn't shows how bad they are and potentially caused you some issues and a hard search on your credit file for nothing.


A person with your credit history would be matched to a lender who is more likely to accept you at the best rates for you.

kingstreet

What are the rent & service charges?

I'm surprised if this is affordable on £22k a year.

streetlovin

The rent is £140 a month and service charge is £12 a month.

I will see then, I am more than willing to let this property go and try again another year.

csgohan4

does the ground rent double every 10 years or something similar e.t.c?

streetlovin

As far as I know theres no ground rent. It is not stated or declare anywhere. And after checking with the HA they said if there is ground rent it will be included in the service charge which is 12quid a month. They also said that the increase will be reviewed at the end of every year to be in line with inflation, for this year it is what it is at the moment. They say it will never be drastic increase, most likely 1-2 % of the total right now. In terms of service charge it will only increase if there is any work that needs doing for communula area. There is no communual area im my property, unless you count parking space and a shed. Theres no garden/hallway etc.

Newbie78

You have had you DIP confirmed?


I will say having been through the Leeds BS /shared ownership process, it can be slow and they can be picky but as long as you are honest with your broker you should be ok


But I am no expert

streetlovin

Well, at the moment I got this email from leeds which says

"We can confirm your AIP has been accepted and we are happy to proceed and this has been reviewd by our DIP team."

kingstreet

It passes the Leeds affordability calculator.

What about the Government's shared ownership calculator? Has someone done this for/with you?

Is it a newbuild or a resale?