FTB mortgage advice

throoderfe

My partner and I are both first-time buyers. We recently did a soft-search mortgage application to see roughly how much we could afford and it was much less than we had anticipated. Especially when comparing to friends and family in similar circumstances.

So I did a full mortgage search with Habito and to my surprise, was told I could take out a bigger mortgage value than the one we were offered as a couple.

Being a bit new to this I'm hoping someone can shed some light on what's going on here. My partner doesn't have a good credit rating, hence why we've only done a soft search yet. And wondered if a hard search and their credit rating might have something to do with it?

Any recommendations on next steps would be really helpful too. Are we better approaching our banks or mortgage advisor?

glosoli

It could be helpful if you can elaborate on:

1) What your incomes are
2) What debts you have
3) Ages
4) Realistic purchase price / loan amount you would be looking at
5) Reason for the "bad credit" rating. For example are we talking about numerous CCJ's/defaults or a one off late credit card payment?

Answers to the above would allow people to give you a more accurate response.

throoderfe

Thanks. This should help:

1) Combined income £75K
2) Partner has £2500 of personal loan debt + £500 of credit card debt. I have £600 on credit card debt but can pay that off in one month from savings. We both have student loans.
3) Both 30
4) Deposit of £35-40K, ideally properpty values of £275-300k, so a loan of around £265K
5) Bad credit because of a number of late and defaulted credit card payments. No CCJs.

glosoli

The income levels should be able to service a mortgage of that amount, assuming your expenditures are normal. Good to know you also have access generally a decent mortgage term length. Current unsecured debt isn't particularly high either.

Main sticking point would be the bad credit issue.

If it was bordering on historic i.e 3-6 years old, everything was now fully up to date including defaults satisfied, and as long there was a satisfactory reason for it i.e redundancy or health related, then you might find success if you approached a lender directly. I work for a main stream bank and have had similar applications approved in the past.

If the debt was more recent, or is currently unsatisfied, it would be best to talk to a mortgage broker so that you are guided on where best to apply to. Depending on the severity of it it may be your only option is a lender who demands a greater deposit and / or higher rates than what is otherwise available.