First Time Buyer - Questions

Underachiever

Hi,

I have a few questions and was hoping someone would be able to assist in answering them;

1), How feasible is it to be successful in obtaining a mortgage with multiple defaults on my credit file (3+)?
2), Will my credit score impact my ability to obtain a mortgage?
3), My annual salary is around £28k, “starter homes” in my area are priced at £295k+, is it even possible for me to look at something like this with such a low income?
4), My parents have offered to support me with a deposit or scheme where they can put “x” amount down, will this improve my eligibility at all?

Sorry if this is the wrong place and for the dumb questions lol!

LawAbiding

1) the devil is in the detail, have these been satisfied and paid off?

2) ignore your credit scores

3) your salary does seem low

4) no idea

Whilst asking on here will give you some direction, honestly book an appointment with a Mortgage Advisor who will look at all the circumstances and give you direct answers.

kingstreet

1. Possible. Depends on registration dates and loan to value.

2. Ignored by lenders. If your defaults are more than three years old or you have a low loan to value you might be on the high street. More recent, higher LTV you'll be with a specialist.

3. Probably not. Work on 4.5 x annual salary for mortgage then add deposit.

4. Not your eligibility, but maybe your purchase price/affordability dependent on scheme chosen.

Get broker help as early as possible.

ACG

1) It is feasible.

2) Yes but more in the sense of what rates payable rather than whether or not you can get a mortgage.

3) At 4.5x income, you are going to need quite a large deposit.

4) It could help, but it could also reduce your options. Parents are going to need to be putting a lot of money into an account as per point 2.

Underachiever

LawAbiding wrote: »

1) the devil is in the detail, have these been satisfied and paid off?

2) ignore your credit scores

3) your salary does seem low

4) no idea

Whilst asking on here will give you some direction, honestly book an appointment with a Mortgage Advisor who will look at all the circumstances and give you direct answers.

All the accounts linked to the defaults are settled / partial settled, the defaults will reach 6 years by April 2020 but I’ve been unable to obtain any type of credit while the defaults are present (including finance on a car).

So the score makes no difference?

Yeah, I’m not really sure how to improve it tbh, most other people I know are only on between £18-£22k in the usual call centre / retail / distribution type jobs so I have no idea how anyone is supposed to be buying all these new homes for first time buyers.

Thanks for the reply

kingstreet wrote: »

1. Possible. Depends on registration dates and loan to value.

2. Ignored by lenders. If your defaults are more than three years old or you have a low loan to value you might be on the high street. More recent, higher LTV you'll be with a specialist.

3. Probably not. Work on 4.5 x annual salary for mortgage then add deposit.

4. Not your eligibility, but maybe your purchase price/affordability dependent on scheme chosen.

Get broker help as early as possible.

All were registered as defaults between Feb-April 2014 so they have less than 1 year remaining on my file.

I guess this is something an advisor would be better suited to answer when they look at things for me, I’ve struggled to get finance for a vehicle so I’m going to assume I’ll have the same issues with the mortgage.

Oh wow, at only 4.5x I couldn’t even afford a 1 bed flat in my area.

The support / deposit would be for around £10-15k so by the looks of things it would have no impact at all.

Thanks for the reply.

ACG wrote: »

1) It is feasible.

2) Yes but more in the sense of what rates payable rather than whether or not you can get a mortgage.

3) At 4.5x income, you are going to need quite a large deposit.

4) It could help, but it could also reduce your options. Parents are going to need to be putting a lot of money into an account as per point 2.

I guess I’ll only know by sitting down with someone.

Ah right, so I might be able to get the mortgage but the rates will be exorbitant.

Simply don’t have that type of amount available, tbh who does, guess I’ll write this off as a no-go for now, out of curiosity how are people managing to get onto the property ladder in 2019 when it’s this difficult?

Thanks got the reply.

Thrugelmir

Underachiever wrote: »

Oh wow, at only 4.5x I couldn’t even afford a 1 bed flat in my area.

Many people start on the bottom rung of the ladder. Not just the current generation either. Saving a deposit takes time and discipline. Buy jointly at a later date perhaps.

8ofspades

Underachiever wrote: »

Simply don’t have that type of amount available, tbh who does, guess I’ll write this off as a no-go for now, out of curiosity how are people managing to get onto the property ladder in 2019 when it’s this difficult?

Lots of ways people get on the ladder - many people save higher deposits (£30k+), live in cheaper areas than you (where I am prices start at around £120k for a flat, £150k for a house), buy with a partner so the 4.5x is based on two incomes, use Help to Buy equity loans on new builds where they only have to provide 5% deposit and borrow 20% as an additional loan to the mortgage etc.

It's good to know where you stand and start to have a look at your options.

Underachiever

Thrugelmir wrote: »

Many people start on the bottom rung of the ladder. Not just the current generation either. Saving a deposit takes time and discipline. Buy jointly at a later date perhaps.

Yeah, the £295k houses are the “cheaper” of the bunch (2 bedroom), most others go north of £500k. Discipline, it would take 11 years saving everything I make to be close to £295k, sure I don’t mind a little hard work but surely that’s insane?

8ofspades wrote: »

Lots of ways people get on the ladder - many people save higher deposits (£30k+), live in cheaper areas than you (where I am prices start at around £120k for a flat, £150k for a house), buy with a partner so the 4.5x is based on two incomes, use Help to Buy equity loans on new builds where they only have to provide 5% deposit and borrow 20% as an additional loan to the mortgage etc.

It's good to know where you stand and start to have a look at your options.

Yeah I would need to save around £170k to bring the total down enough to be eligible for a mortgage, which we all know on £28k a year isn’t going to happen.

I don’t think “buy with a partner” should be the solution, tbh it’s scary to think that this is the way it works and the expectation for anyone to have their own place.

Yeah I guess it’s good to know where things are, after looking at this buying a house is nothing more than a dream for myself as it’s never going to be feasible.

Thanks for the replies and reality check.

8ofspades

Underachiever wrote: »

I don’t think “buy with a partner” should be the solution, tbh it’s scary to think that this is the way it works and the expectation for anyone to have their own place.

Well it depends really - I bought with my partner because we were committed to stay together and once we had the deposit, it was cheaper for us to buy than continue renting together. I never would have afforded to do it alone.
Someone I know did buy alone, and then met someone not long after, which isn't always ideal either - you may end up juggling two properties, arguing over who has to give up their home, or selling up both to choose somewhere together. It depends what you want from life, I guess.

I feel for you living in an expensive area, I really don't know how anyone does it.

AmyShepherd

We had to save £60k cash to buy in our area, which with 4 kids and a hefty childcare bill, wasn’t easy but we got there.

Have you thought about the Help to Buy schemes or shared ownership?

Crumble2018

Living in the South East and earning less than £25000 a year, I'd have no hope of buying a property on my own. Even with my husband, who earns twice my salary, we can't afford to buy a house here, so are having to buy a flat. We eventually hope to relocate to Yorkshire an will hopefully buy a house then.


Sadly, unless you have a highly paid job in London, living in the South East is stupidly expensive, and buying a house is out of reach for most people now.