Costs Associated with Moving - help please!

honeyblond

Hi there,

We're looking to move house (into a new build) and it's been 15 years since we did it last so some advice would be appreciated please from someone who's done it more recently.

Firstly, when we applied for the last mortgage, it was done and dusted in about 5 minutes. I hear horror stories now about how they go through bank accounts and shopping bills to see what your spending habits are. Is this the case? We do owe some money on credit cards, unfortunately, one for £6k is reporting us as in arrears so we're looking for a subprime mortgage and hope to clear this bad debt with equity from the house sale.

Also, we have no savings, but £150k of equity. Can this equity be used to pay for stamp duty, solicitors fees, deposit etc, or do we need money upfront?

Any advice would be very helpful please :-)
Ta

gazter

honeyblond wrote: »

Hi there,

We're looking to move house (into a new build) and it's been 15 years since we did it last so some advice would be appreciated please from someone who's done it more recently.

Firstly, when we applied for the last mortgage, it was done and dusted in about 5 minutes. I hear horror stories now about how they go through bank accounts and shopping bills to see what your spending habits are. Is this the case? We do owe some money on credit cards, unfortunately, one for £6k is reporting us as in arrears so we're looking for a subprime mortgage and hope to clear this bad debt with equity from the house sale.

Also, we have no savings, but £150k of equity. Can this equity be used to pay for stamp duty, solicitors fees, deposit etc, or do we need money upfront?

Any advice would be very helpful please :-)
Ta

Just tell your mortgage advisor that you will be using the first £6k of equity to clear the card debt.

Some lenders will go through everything, but that’s more for people who are either on high loan to value mortgages or are borrowing at the top of the multiples/affordability assessments.

Just done a 4.4x mortgage over 20 years which takes one of us past our retirement age, on a 70% loan to value, with one of us self employed.

They wanted last six months of statements and payslips, and SE accounts for two years.

After that it was fairly smooth. The checked over most things. Wanted us to either clear debts or make sure all debts would be cleared. This helped to stay within their lending criteria.

Not really any more painful than three to four years ago when I did it last.

honeyblond

Thank you so much. We have 1 'bad' debt so it will have to be a subprime mortgage but if we can pay it off with equity at least our credit file will be clear in 6 years. Then we can look at regular mortgages again.

Do you know if we need savings/money to pay for everything up front like fees and stamp duty or can the equity be used?

VentureMM

Subprimes are not too common these days after the crisis 10 years ago, you'd be looking at fairly obscure lenders such as pepper home loans for a subprime; but depending on how 'bad' your credit history is a subprime may not be necessary. You can use the equity to pay for whatever you like. You can use it for your deposit and cover the other fees providing its enough to cover everything. You will most likely need a 10% deposit for whatever property you are looking to buy, but the more deposit you can provide, the less of an impact your debt will have on your borrowing capacity.

Also, to answer your other query, yes you would be required to provide 3 months bank statements from which the lender would look at to judge your spending habit and gain an overview as to whether you could afford the monthly mortgage payment.

It sounds like you could really benefit from speaking to an adviser who can look at all the details of your case and direct you to lenders that are most likely to consider your case.