Absolutely DESPRATE for a mortgage

jazzyja

hi everyone, new here. I would just really like some advice on how to get myself into the best shape to apply for a mortgage! I'm becoming so down about it. I'm living in a crotty rented house with 2 children i feel I'm letting them down. I'm ashamed of my house and my landlord is awful. Any advice would help me greatly. My current situation is - my credit rating is rated poor on experian, stable on clearscore so not sure on that side! I haven't missed any payments in approx 12 months though!, my debt is approx 4k....1 store card 2 credit cards, I have a car on finance, I am a nurse so my income varies....i am currently working extra shifts because of covid but also I need to save anyway! So my income for this tax year will be higher....approx 28k I would say. I will be applying for the mortgage alone and I've given myself 2 years. 2 years to save, pay some debts and improve my rating. I feel like il never get there. Its like a distant dream thankyou and any advice welcome! 

CrazySexyCool

I am by no means an expert - there are others on here who I am sure will be able to offer more useful advice. But I felt that given the time of your post, you may be still up now and/or asleep/working when better advice is posted.

Firstly, can you actually see your credit reports instead of "scores" which lenders don't care about? (they have their own scoring systems)
If you can't, you can access them for free. They will detail things like your accounts, sources of credit (loans, credit cards, overdrafts, etc) and your debt. You should check to make sure there isn't anything you've forgotten about like old unpaid debts, or previous financial associations; and more importantly you should check for any errors.
If there are any problems, you need to deal with those.
If there are errors, you can contact the credit reference agencies and ask them to put a notice of correction on your file.
Important things to look out for are defaults and CCJs as these will make you unattractive to lenders.
If you are not currently on the electoral roll, get on it, this is seen as a positive.

Secondly, have a look at your incomings and outgoings, as lenders will also look at affordability and perform a stress test (i.e. will you be able to make your mortgage payments if interest rates were to suddenly shoot up).
If you haven't already, do a budget, and see if there are any cuts to your outgoings that can be made.

I hope that is helpful!
Good luck with getting a mortgage  

jazzyja

CrazySexyCool said:

I am by no means an expert - there are others on here who I am sure will be able to offer more useful advice. But I felt that given the time of your post, you may be still up now and/or asleep/working when better advice is posted.

Firstly, can you actually see your credit reports instead of "scores" which lenders don't care about? (they have their own scoring systems)
If you can't, you can access them for free. They will detail things like your accounts, sources of credit (loans, credit cards, overdrafts, etc) and your debt. You should check to make sure there isn't anything you've forgotten about like old unpaid debts, or previous financial associations; and more importantly you should check for any errors.
If there are any problems, you need to deal with those.
If there are errors, you can contact the credit reference agencies and ask them to put a notice of correction on your file.
Important things to look out for are defaults and CCJs as these will make you unattractive to lenders.
If you are not currently on the electoral roll, get on it, this is seen as a positive.

Secondly, have a look at your incomings and outgoings, as lenders will also look at affordability and perform a stress test (i.e. will you be able to make your mortgage payments if interest rates were to suddenly shoot up).
If you haven't already, do a budget, and see if there are any cuts to your outgoings that can be made.

I hope that is helpful!
Good luck with getting a mortgage  

Hi thanks for your reply! It was a late one, couldn't sleep
Thanks for the advice.. currently my file doesn't look too bad. I have no defaults, no ccj, although I have apparently missed a payment in January I was unaware of  il have to look into that. I have tried with my rating as 3 years ago it was zero!! I think the problem is my amount of debt spread across cards and of course my car which is essentially a debt I suppose. I need to try cut these down but saving for a mortgage at the same time is difficult in regards to my income my actual wage I have approx £200 left after all outgoings but I do do extra shifts which probably amount to approx £400 a month. Will they look at my entire earnings for the year or just my wage? Do you happen to know how far back they look on the application? Thanks again 

FrugalCat

jazzyja said:

hi everyone, new here. I would just really like some advice on how to get myself into the best shape to apply for a mortgage! I'm becoming so down about it. I'm living in a crotty rented house with 2 children i feel I'm letting them down. I'm ashamed of my house and my landlord is awful. Any advice would help me greatly. My current situation is - my credit rating is rated poor on experian, stable on clearscore so not sure on that side! I haven't missed any payments in approx 12 months though!, my debt is approx 4k....1 store card 2 credit cards, I have a car on finance, I am a nurse so my income varies....i am currently working extra shifts because of covid but also I need to save anyway! So my income for this tax year will be higher....approx 28k I would say. I will be applying for the mortgage alone and I've given myself 2 years. 2 years to save, pay some debts and improve my rating. I feel like il never get there. Its like a distant dream thankyou and any advice welcome! 

While you are out there doing the frontline job, I hope we can all support you in this - after all the rest of us are meant to be doing very little right now.

You seem to have a realistic view on your own position. So congratulations on that - the hardest step is done.
In your 2 year plan I would recommend: Minimise your spending (MSE is great for this), pay off your debt. And try to achieve your first milestone: Become debt free.
Along the way, you will find you credit score increasing.
Once you are there, it would be smart to re-assess your affordability level and look into mortgages then.

One big piece of advice - you're a nurse, which is a job easily transferred. Once you're done saving our hides from COVID (thank you kindly at this point!), it would make sense to look into a move into a more affordable area of the country. Less expensive areas usually lack a strong/diverse job market, which lowers the income level in the area. Look here to show average incomes per area:
https:// www.ons.gov.uk/visualisations/nesscontent/dvc126/
But all areas will have a more or less local hospital. Maximise your income level against the average local income and you will be much better off. Your 28K a year is about £500 a week - which is below average in London, the SE and a few other hotspots. Everywhere else you're an average earner, at least.
This is the biggest financial upside of your career path, not a lot of professions offer this kind of geographic flexibility.

jazzyja

FrugalCat said:

jazzyja said:

hi everyone, new here. I would just really like some advice on how to get myself into the best shape to apply for a mortgage! I'm becoming so down about it. I'm living in a crotty rented house with 2 children i feel I'm letting them down. I'm ashamed of my house and my landlord is awful. Any advice would help me greatly. My current situation is - my credit rating is rated poor on experian, stable on clearscore so not sure on that side! I haven't missed any payments in approx 12 months though!, my debt is approx 4k....1 store card 2 credit cards, I have a car on finance, I am a nurse so my income varies....i am currently working extra shifts because of covid but also I need to save anyway! So my income for this tax year will be higher....approx 28k I would say. I will be applying for the mortgage alone and I've given myself 2 years. 2 years to save, pay some debts and improve my rating. I feel like il never get there. Its like a distant dream thankyou and any advice welcome! 

While you are out there doing the frontline job, I hope we can all support you in this - after all the rest of us are meant to be doing very little right now.

You seem to have a realistic view on your own position. So congratulations on that - the hardest step is done.
In your 2 year plan I would recommend: Minimise your spending (MSE is great for this), pay off your debt. And try to achieve your first milestone: Become debt free.
Along the way, you will find you credit score increasing.
Once you are there, it would be smart to re-assess your affordability level and look into mortgages then.

One big piece of advice - you're a nurse, which is a job easily transferred. Once you're done saving our hides from COVID (thank you kindly at this point!), it would make sense to look into a move into a more affordable area of the country. Less expensive areas usually lack a strong/diverse job market, which lowers the income level in the area. Look here to show average incomes per area:
https:// www.ons.gov.uk/visualisations/nesscontent/dvc126/
But all areas will have a more or less local hospital. Maximise your income level against the average local income and you will be much better off. Your 28K a year is about £500 a week - which is below average in London, the SE and a few other hotspots. Everywhere else you're an average earner, at least.
This is the biggest financial upside of your career path, not a lot of professions offer this kind of geographic flexibility.

Hi, great advice thankyou for that. I never even thought about comparing my income to local average. I think the beauty to my job (at minute thats ironic to say, I know) is i can maximise my income quite alot due to the demand of nurses. Obviously having children I don't want to be working everyday god sends me but I will have to do extra to save and pay off debts. I currently pay £100 a month off my credit card. My car finance is obviously something I can't get rid of as its a 4 year pcp. House prices in my area (North west) are relatively low. I could probably get a decent terraced house for under 100k! I'm not fussy as to what house I buy, aslong as it is big enough. I just want to get on the ladder. Its taking over my thoughts at the minute. I need to try my hardest to do this. My spending, I will admit is poor. I take my children expensive places almost every weekend, I drink too much Costa coffee and I spend a fortune on food!! These are things I need to sit down and re-evaluate. Luckily I don't smoke, drink or gamble on a regular....just addicted to coffee! Again thanks for your advice. Take care x

Unicorn_cottage

Jazzyja - the debtfree wannabe forum is the place for you  https://forums.moneysavingexpert.com/categories/debt-free-wannabe. Loads of advice there. You can definitely get yourself sorted with a bit of determination. Please don't despair. Me and my partner had £25k worth of debt and paid it all off following the advice on this website and forum

[Deleted User]

Have you had a look at shared ownership ? On your income and with 2 children, if its just you, this may be the solution. 

You can “buy” as little as 25% on a mortgage ( and a 5% of the 25% deposit) and Universal credit can be claimed to pay the “rental” element you pay the housing association. 

Have a look at Share to Buy site for properties near you ( new and resales ) and also run your figures through “entitled to” to see what help you can get towards the rent and children from Universal Credit 
Hoping this will be your way forward with your 2 year plan combined with the commitment to pay down the debts 
stay safe and thank you x