First time buyer, advice on affordability checks

mrfirsttimebuyer

Hello!


I am looking to get my first mortgage next year and so I am planning now for the affordability checks, cutting back on expenditure and getting the bank statements into a better shape.


I have a negative credit score due to a satisfied CCJ that expires in July 2019, I do have 3 credit cards, two from sub-prime lenders (Vanquis & NewDay), and a Barclaycard initial, I have no late payments and no defaults, I have 3 bank accounts, Barclay's, NatWest & Santander, I only use around 10-20% of available credit on the cards.


Are there any other steps I should be taking to prepare for a successful application and passing affordability checks?


Many thanks for any advice received!

csgohan4

Speak to a broker who can evaluate your options in detail


But likely a broker who deals in adverse credit will be better but they won't come cheap.


You could use free brokers such as L+C, but once they sniff out your going to be hard work, they usually can't be bothered due to their business model

mrfirsttimebuyer

csgohan4 wrote: »

But likely a broker who deals in adverse credit will be better but they won't come cheap.

I will wait until August/September 2019 before approaching lenders/brokers, I am hoping that once the CCJ has fallen off my credit worthiness will be more enticing, although I get that lenders will work out I had credit problems in the past from the sub-prime lenders on my history. I just want to make sure I am doing all I can now in preparation.

cjv

Lenders cant see who you hold your accounts with, they just see your credit history so don't worry about your sub-prime accounts.

AliceBanned

Try to pay off the credit cards in full each month, if you don't already.

mrfirsttimebuyer

cjv wrote: »

Lenders cant see who you hold your accounts with, they just see your credit history so don't worry about your sub-prime accounts.

I believe that is exactly what they see.

Your credit report tells lenders what type of credit accounts you have with which financial institution, when the accounts were open, the outstanding balance on each and whether your payments are up to date or in arrears.

It will be obvious to a potential lender what risk I am to them.

mrfirsttimebuyer

AliceBanned wrote: »

Try to pay off the credit cards in full each month, if you don't already.

This would be no different that not using the card at-all, i.e. every month a 0 balance would be recorded along with an on-time tick on my file.

Currently I have around 10% use on cards to show I am using credit products, and always pay on time.

AliceBanned

mrfirsttimebuyer wrote: »

This would be no different that not using the card at-all, i.e. every month a 0 balance would be recorded along with an on-time tick on my file.

Currently I have around 10% use on cards to show I am using credit products, and always pay on time.

If they are low balances then fine. Mortgage lenders don’t want to see high outgoings is what I meant. Personally I am trying to pay mine off so that I can remortgage.

mrfirsttimebuyer

AliceBanned wrote: »

If they are low balances then fine. Mortgage lenders don’t want to see high outgoings is what I meant. Personally I am trying to pay mine off so that I can remortgage.

I think this is a balancing act, as on the one-hand I have to create a history of managing credit, but I get your point that when it comes closer to the application time i.e. next August the credit cards should be zero for affordability even though lenders want evidence that I can manage credit accounts in the first place

cjv

mrfirsttimebuyer wrote: »

I believe that is exactly what they see.



It will be obvious to a potential lender what risk I am to them.

Sorry, I thought you was worried that a potential lender could see who you hold your accounts with (Vanquis for example), they do not see this information.