First time buyer and New Build

bethwilliams95

Hi,
Me and my husband are first time buyers and we have reserved a new build property. We were told we could pay soo much deposit on exchange of contract and then pay the rest a few weeks before completion. Im ok with that.

My worry is if we will get approved for a mortgage. We have 2 decisions in principle, 1 with halifax (Soft search) and one with natwest (hard search). However, we have been in our overdrafts a lot in the oast few months and have recently come into some money which has paid all our debts and overdrafts off.
When applying for a mortgage we have to give 3 months bank statements. With my new build only being at stage 2 and the mortgage not needing to be in place until stage 7, do we have enough time for our bank statemenrts to show positive figures only, and will that stop us from being approved

Im very worried that we will get declined the mortgage based on the previous figures when renting. We are now living with family and a lot more sensible with money and our credit scores are 'Excellent' on creditexpert.

Sorry its so long......

Thank you in advance.

sal_III

You will need full approved mortgage application for the exchange.
Your reservation from will have a time limit for the exchange (usually around 28 days). This is mostly a wishful thinking on part of the Developer and they will turn a blind eye if there is a progress being made, but they have the ability and right to cancel your reservation and keep part or all of the reservation fee.

So you have to think clearly whether you can/want to wait for the mortgage application.

Any lump sums received to your bank account couple of months (3-6) before the mortgage application will need explaining - gift from family etc. The implication here are 2 fold - the Lender will want to make sure it's not a loan that needs repayment and your solicitor will need to know the source to comply with money laundering regulations.

If you had DIP already, that means the Lender is happy with your credit score. So I doubt the existance of overdrafts in the past is going to impact your application.

bethwilliams95

Hi,

It was a payout from an insurance company due to a car crash (not our fault). The developers have said to reasses the situation of the contracts etc in 4 weeks as the house is still only at an early build stage. And the house won’t be ready til December-March

So the overdraft situation should be ok? I just don’t know if they would say we were living beyond our means and that we can’t afford it.

Thanks

sal_III

bethwilliams95 wrote: »

So the overdraft situation should be ok? I just don’t know if they would say we were living beyond our means and that we can’t afford it.

You already have DIP (2 in fact) which means that you have passed the affordability criteria.

After DIP, only a small portion of applications fail and this is usually due to a) incorrect information supplied with the DIP application or b) valuation of the property comes lower that the purchase price.

Relax.

kingstreet

bethwilliams95 wrote: »

When applying for a mortgage we have to give 3 months bank statements

To whom?

What is the loan to value? That's the mortgage amount divided by the purchase price.

bethwilliams95

It’s broker wants the 3 months statements. They have asked for it as part of the documents

The value of the house is £134,995 and we are using HTB so it will be 75% LTV

kingstreet

In which case it's unlikely NatWest or Halifax will want to see your bank statements.

We are required to collect them and hold them on file; but standard requirement for both lenders at 75% or less is payslip(s) alone.