#AskLandC Mortgages

Former_MSE_Andrea

Hi everyone

LandC Mortgages is here on our Forum to help answer its customers' questions. If you're using LandC to get a mortgage and have a question pop it on here and it will do its best to help.



Related on MSE:

Free First Time Buyers' Mortgage Booklet 2017

Remortgage Guide 2017

Ultimate Mortgage Calculator

snoop2008

Good evening!!


My daughter is hoping to use this service in the future as a first time buyer.. We have read much of guides but I am hoping if someone can clarify some points for me..


Credit file: Forgive me for being not so clued up.. she has never had a credit card, has lived here with me for 30 years.. Has direct debit mobile phone contract for several years now. is registered on the ER.. and has a hefty deposit she has been saving for almost 10 years in her bank account.. Has worked with her employer for 6 years.. I have read about little or no history, it is a good idea to get a credit card and start building up her history..


Is this necessary to do as regarding getting a FTB mortgage please?


Many thanks for your advice in advance!

LandCmortgages

Hello, thanks for getting in touch with L&C mortgages.

This is a frequently asked question and not one that is easy to give a definite answer to.

When you make a mortgage application lenders will check with a credit reference agency to see how credit has been conducted and also credit score your application. This tries to build an overall score of your profile, which must be high enough for lenders to be willing to offer you a mortgage. Each lender will have their own scoring system so if you don’t meet one lender’s requirements doesn’t mean another won’t offer a mortgage.

If you’re buying a house with a mortgage, your credit score must be high enough for lenders to be willing to offer you a mortgage. The exact scoring system and score you’ll need varies from lender to lender, so some may score differently or require higher scores than others. And having a good-sized deposit, typically 10% of the property value or more, will also work in your favour.

When looking at the credit profile of someone that has not had any credit at all, isn’t registered at the address etc, lenders can struggle to have enough to go on to build up a profile. It might seem odd, but if you’ve never had a credit card or personal loan, this can mean you have a low credit score simply because there isn’t any evidence to show how you would manage any borrowing. Some people choose to take out a credit card, repaying what is owed every month therefore demonstrating you can manage debts sensibly. And this can help some people build their credit score. But it’s also worth noting that this may not be a ‘quick fix’ – as it also means that you have easy access to credit already, which may make some lenders a little more hesitant. Some forms of credit such as pay day loans will actually work against you and should be avoided.

Given that lenders don’t publish scoring requirements it’s not an exact science. So it’s impossible to be sure whether your daughter will benefit from taking a card, or whether her profile is already clear enough for a lender to be happy. You can get an agreement in principle from a lender which should be a good indicator but these do generally leave a footprint so don’t undertake a large number from a range of lenders.

Martin’s guide to boosting your chances and building a credit score: http://www.moneysavingexpert.com/loans/credit-rating-credit-score
covers a lot of these issues and talking to a mortgage adviser may also help your daughter work things through

We hope that this helps.