First time buyers, are we being realistic?

Missfirerose

Hi everyone, looking for a bit of advice.

My partner and I are in our early twenties, living with my parents currently. We have recently finished uni and have started relatively secure jobs (nurse + IT administration). Our combined income is £42k pre tax not including overtime. We have never rented or owned property. We don't have much of a credit history- though we both have mobile phone contracts, car insurance and a credit card which is played in full every month and the credit utilisation is low. We have never had any debt or used our overdraft.

We are hoping to get a mortgage next year on a £150k flat. We have a £30k deposit currently, and hope to add at least £10k to it by the time we are ready to buy. My parents are happy to be a guarantor if needed- they have a near perfect credit score, own property valuing £300k+ , £30k+ savings and combined pre tax income of around £50k.

The in-laws think we're being unreasonable and no lender will accept us due to our lack of credit history. Obviously I have no experience in this area so I don't know how realistic we're being. Am I getting my hopes up needlessly? I know each lender will have there own criteria but I just wondered if this sounds like a realistic plan.

Cheers!

hellyboo93

My partner and I bought a house a couple of years ago with very similar figures to you. We got a mortgage with Halifax no problem and the only credit we'd ever had was a student overdraft each. At the time all our friends were getting credit cards as they told us that it was necessary for a mortgage but we never bothered and all was fine.

Bass_9

To be honest my credit history only came from my credit card and I was fine.

You sound like you're in a decent position so I'd be surprised if you had any problems. You could always have a chat with a mortgage advisor, but I would also recommend having a look at HSBC for mortgages.

TBagpuss

I don't think you are being unrealistic. Are you both on the electoral roll ? It sounds as though you will have a good sized deposit . If you are worried, why not have a chat now, with an independent mortgage adviser, that way if there is anything else you need to think about you have several moths to sort it out, before you start the process formally.

kinger101

Are your in-laws underwriters for the bank? That's the only opinion that matters. I doubt you'll present much of a problem but a mortgage broker might be useful.

Bossypants

Sounds perfectly doable to me, I had virtually no credit history when I bought my first place but it never came up as a problem.

Snakes_Belly

You can get an agreement in principle. You will not need to have found a specific property just have a figure in mind that you want to borrow and how much deposit you have. This agreement will last for about 6 months. It does not mean that the mortgage is agreed as the application is done when you have found a specific property. It gives you an idea of what you can borrow. Should not affect your credit score.

pinkteapot

Bass_9 wrote: »

You could always have a chat with a mortgage advisor, but I would also recommend having a look at HSBC for mortgages.

Note that HSBC have very competitive rates, but do so by only lending to the safest bets. In particular, when we last moved a few years ago, they wouldn't lend because I was in the probation period of a new job, even though it was a permanent job.

If you've started work recently and are in probation period, speak to a broker as it does reduce the lenders who'll lend to you. Note that HSBC don't offer their mortgages through brokers (only direct) so if you do like the look of one of their deals, give them a call to check if their policy has changed.

We got a lifetime tracker with Santander (no early redemption fee) and switched to HSBC six months later when I was out of probation. *sigh*

ps Your in-laws are wrong. Credit cards (paid off in full each month is good) and mobile phone contracts are all a lot of people have early on.

armchaireconomist

I bought a house myself at 21 with no credit history beyond a phone contract, you're right that it looks good but it isn't the be all and end all. Go speak to some lenders see what they say.

SensibleSarah

I'd agree that on the face of things, I can see no issues. I managed to get a 90% mortgage when I was on a single income of £26k, very little credit history - just a phone contract for several years and a not very utilised graduate overdraft to show I could basically handle credit without going crazy. I did use a broker (friend of a friend). This was a couple of years after the credit crash so I did have to give an unseemly amount of bank statements (9 months worth I think) and answer some pretty in-depth questions about my spending habits. I think you'll get away more lightly than that these days.

thelem

HSBC do sell via brokers, they just have very slightly different products (possibly just the name is different).


Looking at your figures: 150k house, assume £35k deposit to be on the safe side and allow for other costs such as conveyancing (probably no stamp duty because you're first time buyers).


You'll be after a 115k loan, which is a loan to value of 77%, which is very good for a first time buyer.
The loan is 2.74 times your combined salary, which is also good for a first time buyer.


I don't think you'll have any problems getting a mortgage. Do make sure you're on the electoral roll though.