Will we get a mortgage?? Help much appreciated

Danny174nw

Hello Guys Me and and my partner are ready to take the next step and purchase our first property, My partner i believe has OK credit as she does not have any defaults, late payments or CCJ's however i think her problem may be the amount of credit she actually as which i will state in this post. On the other hand my credit is not great largely thanks to immaturity and ill discipline before i met her. I have defaults and late payments and payday loans on my credit file which i will go into detail about. At the moment we are currently looking at new build properties mainly due to the Help to Buy loan and "only" having to acquire 5% deposit. I use the word "only" lightly lol. We are looking at a property priced at £350k which will require us to have a deposit of £17.5k. We are being gifted this deposit from her parents.

Ill now get into the nitty gritty:

Income
My salary - £29,000
Partner's Salary - £18,787
Joint - £47,787

My Financial account
Outstanding Car Finance - £7400 with 36 months remaining at £224.29 p/m
Unsecured Loan £1200 with 16 months remaining at £69.64 p/m

My defaults and Late payments and payday Loans
4 payday loans taken out in 2013 for small amounts max £100 all settled fully straight away
4 payday loans taken out in 2014 also small amount and all settled fully straight away
2 Payday loans in 2015 with one fully settled straight away and another loan with late payment and finally settled halfway through the year.

Credit card in arrears for 6 months and settled in May 2015 - £317
Credit card defaulted in March 2014 and finally settled in Nov 2015 - £603
Mobile Phone contract defaulted in July 2015 and settled in Jan 2016 - £71

And finally one more payday loan taken out on 04/19 and settled straightaway - £100

My Partner's Financial account
Outstanding Car Finance - £6494
Credit card - £2730
Credit card - £1125
Credit card - £3167
Joint Loan although in her name - £11,271
Mobile Phone contract - £23 p/m

Hopefully thats the hard part done, we are hoping to be able to pay off all the credit card debt before we start on the journey to trying to acquire a mortgage. Based on all the information above we wanted to know what are chances are based on how everything is now, or maybe no chance at all. If that was the case what could we do give ourselves the best possible chance of getting a mortgage.

Thanks in advance to everyone any advise whatsoever will be much appreciated

Bozzer89

350k I don't think that is doable. I think I'm correct in saying they normally give around 4.5x your salary so your looking at 200k maximum

Danny174nw

Hello Bozzer89 thanks for your quick reply, as we are hoping to go through the help to buy scheme, we should have £70k equity loan and £17.5k which will be our deposit which would give us £87.5k in total leaving us to try and acquire a mortgage of £262.5k, do you think this is possible?

bigstevex

100% No, come back to the real world, 4.5x as above is a maximum, then you'll have to reduce that as you have other commitments.

Clear all your debts, keep a good credit rating in the process, save a deposit on top of the gifted deposit to get your loan to value down and then start looking in the 200-250k region with those salary figures.

bigstevex

This is before even taking into account defaults and missed payments etc too

Danny174nw

Thanks for your reply bigstevex we will be trying to clear all debts before we start the process anyway so hopefully that will stand us in better stead.

Thanks

bigstevex

Danny174nw wrote: »

Thanks for your reply bigstevex we will be trying to clear all debts before we start the process anyway so hopefully that will stand us in better stead.

Thanks

My reply may seem a little harsh when I read it back sorry. I'd fully focus on your debt via the debt free forums first and keep a squeeky clean credit history, no missed payments, no overdrafts, no pay day loans. Get out the debt cycle and begin saving, you may find you don't need help to buy then too

Danny174nw

No problem at all bigstevex, I prefer people to say it how It is, the only reason we were looking at that property was to qualify for the help to buy scheme, however perhaps it might be better to save up more deposit and look for an older property and clear debts.

amnblog

Danny, regardless of your debts, you can borrow more than 4.5 x times the household income under the H2B Scheme.

BigSteve was talking about affordability, and that will be a factor.

The bottom line however, is that your maximum mortgage lending under the scheme will not exceed £217,000.

Danny174nw

Hello amnblog thanks for your reply, forgive me i am a newbie when it comes to this. So when you say my maximum mortgage lending under the scheme will not exceed £217,000 is that due to our income?

[Deleted User]

Danny174nw wrote: »

Hello amnblog thanks for your reply, forgive me i am a newbie when it comes to this. So when you say my maximum mortgage lending under the scheme will not exceed £217,000 is that due to our income?

Lenders can and will go to 5x income on mortgage applications. Howver the Help to Buy scheme states that the maximum mortgage allowed when using h2b is 4.5x household income. That is a red line for them, no negotiation. If your household income is £47787 then your maximum mortgage will be £215,041

In addition to your declared outgoings you also have to factor in the equity loan repayments. A lot of lenders work on a 3% a year figure so if you are borrowing £70k from help to buy, thats effectively going to be another £175 a month commitment to be taken off your income.

You dont state what her loan payments are? the balances are almost irrelevant as lenders work on the monthly payments