First time buyer - mortgage with FTC at work and car finance?

kamalious

Cakeguts wrote: »

In other words if you can give up your feeling of entitlement to a nice new metal box on finance you can afford a much better house. I know what I would do.

You can't say you're not being patronising if you're choosing to berate my choices by claiming I have a "feeling of entitlement to a nice new metal box".

Cakeguts

kamalious wrote: »

You can't say you're not being patronising if you're choosing to berate my choices by claiming I have a "feeling of entitlement to a nice new metal box".

That is how it comes over in your first post. It reads as if you feel that you should be able to afford a new car on finance and get the mortgage you want and that you will do anything to not have to give up the car. A car is basically a metal and plastic box on wheels that loses money very quickly. Buying on finance means that you just lose more money quicker and as you can see from another post prevents you from borrowing more money to buy a better house.

The cheapest way to get a car and not lose much money as most people know is to buy an old one that has already lost most of its value in depreciation.

kingstreet

kamalious wrote: »

From you experience as a broker, @kingstreet, is 6 months enough time between credit applications?

This is an unanswerable question unless I have every other speck of application data in front of me.

A strong application might withstand several searches in a short period. A weak application might go from accept to decline for the same reasons.

You need to be able to view your overall application data objectively to see the strengths and weaknesses, or have someone do it for you if you can't do it yourself.

Strength

Time at address (3Y+)
Time in employment (3Y+)
Larger deposit %
Source of deposit (savings/equity)
Lower amount needed compared to maximum affordable
Positively conducted credit.

Typically, your application will require latest month's payslip and latest month's bank statement at most.

The weaknesses are basically the opposite of the above. If you have lived in four places in the last three years, had three jobs, have a 5% gifted deposit, need to borrow the maximum possible and had some credit issues three or more years ago your application is going to be under greater scrutiny.

You'll probably be asked for three months' payslips and bank statements as a minimum.

kamalious

kingstreet wrote: »

This is an unanswerable question unless I have every other speck of application data in front of me.

A strong application might withstand several searches in a short period. A weak application might go from accept to decline for the same reasons.

You need to be able to view your overall application data objectively to see the strengths and weaknesses, or have someone do it for you if you can't do it yourself.

Strength

Time at address (3Y+)
Time in employment (3Y+)
Larger deposit %
Source of deposit (savings/equity)
Lower amount needed compared to maximum affordable
Positively conducted credit.

Typically, your application will require latest month's payslip and latest month's bank statement at most.

The weaknesses are basically the opposite of the above. If you have lived in four places in the last three years, had three jobs, have a 5% gifted deposit, need to borrow the maximum possible and had some credit issues three or more years ago your application is going to be under greater scrutiny.

You'll probably be asked for three months' payslips and bank statements as a minimum.

This is the kind of information I was after, thank you so much.

I've rented for the past 2 years or so but I've kept all of my financial accounts and anything important registered to my Mum's house, where we've lived for 18+ years. I finished university three years ago and I have worked at different places in that time, including a year out for my Masters, but by the time it comes to a mortgage application I'd have been at my current role for a year (providing I still stay). I read that 6 months employment at your current position at the time of application is usually a good starting point.

Deposit wise, I'll be going for a new build which is 5%, but you also get the HTB Equity Loan which is 20%, so the mortgage I'll need will be 75% LTV.

Thanks again for the help so far!

kingstreet

kamalious wrote: »

Deposit wise, I'll be going for a new build which is 5%, but you also get the HTB Equity Loan which is 20%, so the mortgage I'll need will be 75% LTV.

Yes, but you'll have to satisfy the Government's HTB affordability calculator which can often result in a lower affordable amount than a lender would consider.

Lenders will take into account ground rent & service charges and typically 3% of the equity loan amount as a cost.

If you haven't already done so, download the calculator and the HTB Buyer's Guide to ensure you get no nasty surprises.

https://www.gov.uk/government/publications/help-to-buy-equity-loan-calculator-and-guidance

https://www.helptobuy.gov.uk/equity-loan/equity-loans/

kamalious

kingstreet wrote: »

Yes, but you'll have to satisfy the Government's HTB affordability calculator which can often result in a lower affordable amount than a lender would consider.

Lenders will take into account ground rent & service charges and typically 3% of the equity loan amount as a cost.

If you haven't already done so, download the calculator and the HTB Buyer's Guide to ensure you get no nasty surprises.

Perfect. That calculator is really helpful. Thanks again

ceb1995

kamalious wrote: »

Hi all,

I'm planning to buy my first house by the end of the year, maybe around September. I'm only 24 and I'll be buying by myself, so I'm really excited!

I've been in my current role for 6 months, but I've just seen a great position in a major TV company that I want to apply for. The only snag is that it's a 9 month fixed term contract. This isn't an issue for me, as I'd hope I'd be made permanent or the experience gained would make finding a new job much easier. My only concern is applying for a mortgage, as I've read that most lenders won't consider you if you're on a FTC.

Also, my current car finance finishes in September and I'm most likely just going to get a new one as I don't want to buy it outright. Would applying for a new car finance just before my mortgage really hinder my chances, or would I be better in applying for a mortgage before (say, July as an example) and then going for the car?

So to sum up...
- Should I go for the FTC role and how would it affect a mortgage application?
- How should I go about renewing car finance in relation to a mortgage application also?

Sorry for two questions, but I can't think of anywhere better to ask! Advice would be much appreciated!

I'm on a fixed term contract of two years and over a year into it, lloyds accepted my income for our mortgage application as I'd been there over a year. However, there are two of us and i'm the lower earner so that could made a difference.
When we were deciding between houses and flats, just having £100 a month ground rent made a fair bit of a difference to what they could offer us so if you can avoid other credit commitments that could help.

kamalious

ceb1995 wrote: »

I'm on a fixed term contract of two years and over a year into it, lloyds accepted my income for our mortgage application as I'd been there over a year. However, there are two of us and i'm the lower earner so that could made a difference.
When we were deciding between houses and flats, just having £100 a month ground rent made a fair bit of a difference to what they could offer us so if you can avoid other credit commitments that could help.

I'm going for a house specifically because of this - been advised by nearly every person that I've spoke to that going for a house is a better long term option. I've been working the past few months and am continuing towards paying off any credit, so the only things I should have are my phone contract and car payments.

OnTheLadder

We bought our house as FTBers in April 2017. I had only been working since Aug 2016 in a fixed term Graduate role and had been at my current address less than 3 years. I also Voluntarily Terminated a car on finance, due to getting a company car and no longer needing it, just before applying for the mortgage. My partner earns less than me and has a car on finance but had been in his job role for 2 years. We had a 10% deposit and we were borrowing less than the max they were willing to lend. We had no other debts/credit. There were no issues with our lender (Nationwide) and it was all plain sailing. This was in the South East. My advice is to get a good broker, and take their advice. Ours was invaluable. Good luck!