First time buyer - advice needed

itchyfeet80

Hi all,

I'm after a bit of advice really. I moved out of London and back in with my mum a year ago to pay off loans and credit card debt and save up for a deposit. My aim was to get together a 10% deposit on a house up to £140k by May 2017. I've now paid off most of my debt with just £2.5k on a 0% credit card and a £99 per month motorcycle loan (18 months left on that) remaining. I've built up £10k of savings so far (some is in H2B ISA so I would qualify for £1k bonus, too). I have a full-time permanent job and earn £32k, plus my travel costs are all paid for by my employer. My credit history is pretty good with only two late payments on a closed CC from early 2012. I've got settled loans and CCs, Experian rating is 957/999 Clearscore is 453/700 and Noddle is 586/710. I know the scores are irrelevant as lenders will have differing criteria, but this is the best way I can summarise my file.

I've just seen a house I really like for £129k.

So, my questions really are: is it worth me pursuing this house? Would I qualify for a mortgage when I haven't quite got a 10% deposit? I've done some affordability calculators on lenders' websites and this amount is within the limits of all of them, but I don't know how accurate these are or whether only having a very small deposit would affect them. I just wanted to get some thoughts on my situation before I go down the avenue of a broker and DIP. Ideally, I wanted to get £15k saved and my CC balance under £2k before applying, but this house looks perfect for me which has got me wondering if it's worth trying now or if I should just wait so that I can get 90% LTV rates instead.

Thanks in advance!

da_rule

Something you haven't mentioned (but i'm sure you've considered) is the money for costs. Legal fee's, stamp duty (£80 on £129k), moving costs, money to cover any essential furniture etc. Once you have the money for this and a 10% deposit you'll probably be in a much healthier position.

You may be able to find a lender now who would go to a 95% LTV, they are becoming more available, but you may end up losing out when you factor in the higher interest rate. Have you tried doing an online mortgage comparison based on only a 5% deposit?

ACG

I think you will be fine.

itchyfeet80

I have considered the fees, etc and if I was putting down a, say, 7% deposit then I would have enough to cover these. I get paid again on 21st March and this will boost my deposit even more (plus I will also have cleared a bit more of the credit card by then, too). Is it worth me just getting an AIP online? I'm unable to call a broker today because I'm caught up in meetings all day.

Edited to add: Sorry, I forgot to mention that I've done a mortgage comparison online based on 7% deposit and there are a lot of options, some of the lowest rates are Family mortgages which won't be available to me, but there are a lot of others.

ACG

It depends, if you plan on using a broker then getting a DIP can cause more hrm than good. If you plan on doing it yourself then it may be a littl different. All I would say is this is a massive purchase, rushing it is probably not the best way forward.