Ive got a 100K in cash and cant get a 50K mortgage. Really?

Mkaan

Omg...you are so like me! No credit card, no overdraft and no loan- ever!

N im about to start looking for a place with around £70k saved ( over a good number of years) from a very low salary. Hope i really really do get a mortgage!

Good luck

davidmcn

Fillippobasso wrote: »

I think the system is bizarre. as long as I agree to my deposit being used as a guarantee I don't see what the issue is.

They can't really "use" your deposit.

The whole process from an initial default on a mortgage, through to court, gaining possession, marketing and completing a sale, can easily take a year. That's a year of having to cover their own costs in having lent the money, paying for legal fees, etc.

Plus the fact that nothing in life is guaranteed - that valuation could have missed something fundamental, you might have wrecked the house, property prices might have plummeted, your lawyer might find some flaw in the mortgage deed - there are still risks.

sparkey1

Fillippobasso wrote: »

No I don't have any credit cards. only debit cards. I don't have a clue what my credit rating is but I have never been in debt, overdrawn or even taken out a loan before.

Thats the problem then. If you have no credit history, you have no record of paying your bills, so your risk is really high.

Its possible to fix.

Are you on the electoral roll?
Do you rent now from a landlord?
Do you pay utilities... Gas, electric?
Do you have a contract mobile?

Fillippobasso

sparkey1 wrote: »

Thats the problem then. If you have no credit history, you have no record of paying your bills, so your risk is really high.

Its possible to fix.

Are you on the electoral roll?
Do you rent now from a landlord?
Do you pay utilities... Gas, electric?
Do you have a contract mobile?

I am on the electoral roll I think. I don't rent from a landlord at present. I pay utilities and I have a contract mobile

Ergates

ACG wrote: »

Or the harsh answer is - their money, their rules.

A lot of the rules aren't theirs either - they're the FCA's

davidwood681

Self employed/directors get a bad deal when it comes to mortgages ( I get why too ) but it seems they're void of common sense sometimes.

Fillippobasso

I have just been offered a bridging loan for 32K. and from what I gathered I would have to pay 10K in 1st year and then 32K over 6 years...

However, they are looking into giving me a 55k loan if I agree to use my 80k deposit as guarantor basically. I was told they would need to make some phone calls and would let me know tomorrow if this is doable

jonnygee2

I have just been offered a bridging loan for 32K. and from what I gathered I would have to pay 10K in 1st year and then 32K over 6 years...

What's the interest rate?

The problem is that you are currently classed as high risk because you have limited history. Therefore you will probably pay more interest.

It may make more financial sense to wait one or two years, rent, build up your credit rating, and wait until you can get a conventional mortgage. You will get low interest rates and probably end up paying less overall.

csgohan4

davidwood681 wrote: »

Self employed/directors get a bad deal when it comes to mortgages ( I get why too ) but it seems they're void of common sense sometimes.

People who are starting out as self employed quite rightly don't have much trading history and lenders are more skeptical again quite rightly.

As Self employed myself I got a mortgage but I had 2 years accounts. Their money their rules, so you can only go by they put in front. A good broker will help for self employed with 1 years accounts but anything less and it gets very tricky

enthusiasticsaver

That bridging loan sounds like high interest. An extra £10k in interest over 7 years sounds extortionate. Banks have to follow strict lending criteria these days and have codes of conduct which make sure they lend responsibly. As you have no credit history and no guarantee of income you are a bad risk. Repossessing a property is not that easy and is expensive involving court costs, debt collectors etc etc etc. They do not go into giving mortgages with the idea that they can always repossess. That is a last resort.