First Time Buyer Help

JJLeeds90

Hi,

Im new to the site and I’m looking for a bit of advice on my (peculiar) circumstances please.

I am looking to become a first time buyer once we have found the right property. I currently rent a house with my girlfriend, her daughter (8) and our 10 month old son.

She has got really bad credit and has just finished a DMP through stepchange and her credit file is awful (her ex left her with a load of debt etc). Plus she is now self employed (only for around a year) so I think including her on the mortgage will leave us with no chance what so ever.

Because of this I will be doing a single application. However after reading a few threads on here I am a little unsure of what I need to do.

Will the lender count my partner, her daughter and my son as dependents (therefore 3)?

Or will it be 2? (My son and my partner because her daughter isn’t mine?)

Or will it just be one (my son)?

It looks like it makes a a huge difference on the affordability calculators I have done online.

I presume all lenders are slightly different and look at circumstances differently and I suppose a good mortgage advisor/broker will hopefully point me to the most suitable lender. But I thought it would be worth asking on here if anyone can shed any light or have seen any similar circumstances before.

Finally, just to make things a little more complicated. I have got a good but not perfect credit report/history. All my scores are good (I know the score isn’t important it’s more late payments and defaults etc)

I stupidly used a 3/4 pay day loans around 2/3 years ago. All paid on time but having seen a few threads on here I now appreciate how damaging it can be. I now earn a lot more and am a lot more stable. I have an overdraft but not used it in over 2 years and only use my credit card for expenses at work. I have had 1/2 late payments in the last 5 years and that is it. Everything else has always been paid on time and cleared.

Appreciate any advice/help/stories of similar circumstances.

And if anyone would like or need any more info to be able to help please just ask.

Thank you

Hutchd97

Hi,

I will try and answer those as best I can for you.

First of all your girlfriend's DMP is not necessarily an issue, the fact it is now paid off is a bonus, was it paid satisfactorily for the past 12 months (no missed/late payments on it)? If so there are lenders who will accept that. Again the fact she only has 1 years self employed history is not a show stopper, as long as she has submitted her first years accounts they can use that. As it is her first year I would t asimagine her net profit which is what lenders would look at would be quite low, most self-employed people fall in to the trap of making their net profit as low as possible to reduce their tax liability but then that bites them when they try to get a mortgage!

If you were to do it just in your name, first of all you don't need to count your partner as a dependant as she has her own income. Does your son live with you? If so he would be a dependant, if not and you pay maintenance then you would just include the maintenance payment as a commitment but him not as a dependant. As for your partners child, technically as you are not married I would argue that she is not reliant on you and therefore would and should not be classed as your dependant.

If you haven't had any pay day loans in the last 2 years you should be ok, the 1/2 late payments in the last 5 years should be fine as well.

A lot will come down to the amount of deposit that you have, the bigger deposit you have the easier it will be!

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Kind regards

JJLeeds90

Thanks for the reply it is really helpful and I am very grateful.

In answer to your questions

Her credit file is still really poor and yes you are correct, her net profit for the first year is very low and I am sure this will have a negative effect on a mortgage application and how much we/I can lend.

That's great that's what I had wished for.

Are you a mortgage advisor or work for a broker or?
Apologies I get a little confused between the two.

Thanks again for all your help

ACG

If your partner is going on, her income can be used with some lenders but you would then have 2 dependants.

If your partner is not going on the Mortgage as she has an income, she would not be a dependent I am assuming? She could support herself and her kid if necessary? Meaning it would be 1 dependent, your child.

Is the deposit yours or joint? If it is joint, you may find you need to do a joint application.

Your partner could probably go on a Mortgage with you if you have a 15% deposit, possibly less. Rates would be a little higher but not horrendous.

I think the big question is where the deposit has come from. That is one thing that will determine your options.

JJLeeds90

Thank you.

No I will be doing just a single application and the deposit is made up of two parts. 50% ish what I have saved up putting some a side each month. And the other 50% ish which my mum and grandmother have kindly given me.

So my partner hasn!!!8217;t put anything in to the deposit savings. She does earn enough to support herself and her child.

Thanks again

ACG

I would double check with the lender you decide to go with, but I would be looking to put down one applicant, one dependent in that case - assuming you do not want your partner on the property.

But double check before doing any DIPs/AIPs or application.