First time buyer help - how can I prevent rejection?

JanineB

Hi everyone,

I am looking for some advice. I am just a few weeks out of a relationship with my partner. I am still in our home which is a rental but it's very expensive. I have a £25K deposit saved up and ready to go. It would be much cheaper for me to pay a mortgage than rent so I'm ideally looking to buy for myself ASAP. I can afford to buy up to around £150K.

I am a first time buyer so a bit nervous. My credit rating is excellent. It's 999 on MSE credit club. I have a decent salary at £34.5K p/a.

I have however read about the 3 month's bank statements. I have never missed any payments etc but usually my spending was down to the wire every month. My partner and I used to pool our money in a joint account for all spending after our joint and separate bills were paid. He would get paid on the 20th of the month and I was the 31st so naturally we would spend his wages, then mine when they came in etc. I'm just worried they will see this and think badly in some way. Re the joint account - don't worry this has been closed.

Debt wise, I have credit card debt of £10.5K on a 0% card which I pay well over the minimum payments for each month (£370 to be exact). I know having this debt will reduce the amount providers will lend me but will the fact I have debt at all make me look financially unstable and lead to rejection? I have had an offer from my parents to pay this off and I can pay them back. I wasn't sure if this would help. I also have a student loan of £9K which comes off my wages at source monthly.

Please let me know if you think I am just over thinking or if there's anything I should correct before applying for a mortgage. I really don't want to risk rejection and have to stay here longer than I have to. I have already heard so much conflicting advice ranging from - you have nothing to worry about to you really need to eat toast and beans for 3 months.

MovingForwards

Speak with a broker as they will put you at ease and place you with the right lender.

Ask friends of family for recommendations, if they have purchased in the last 12 months or so. If they haven't, have a look through the posts and see if any of the brokers who comment on MSE catch your eye.

I picked my broker from here, as have many other members. Some have specialisms but also deal with regular applications like yours.

@haras_n0sirrah comes across very well, as does @ACG (my broker) , @Deleted_User is a catch all broker rather than specialist to one type of client.

You don't need to eat beans on toast, just be careful with spending, nothing frivolous, no extra credit, main thing is your spending is realistic otherwise that gets questioned too.

haras_n0sirrah

When we are looking at bank statements we are looking at several points
1) are you living in your overdraft (or more crucially going over it and incurring bouncing direct debits)
2) Does your salary match between bank statements and payslips
3) any undeclared commitments 
4) anything that looks as though it could be a problem (payday loans, large gambling transactions)

Disposable income is disposable - if you live at home not paying rent and are up to the wire on your overdraft plus multiple loans and credit cards then that may be a problem but other than that it really doesn't come into it 

JanineB

No overdraft / never had a payment bounce

Yes my salary will match

No loans, payday loans, gambling etc

SueF1

Turn the clock back 4 years and I was in almost exactly the same situation (quite scary actually how similar!). Split up with partner needing to buy on my own, same salary, same amount of cc debt, deposit of £30K. Got myself a great broker and she sorted me out. Got a mortgage and bought a flat for £155K.
Cannot recommend the use of a broker enough, worth their weight in gold. 

corcutt

The process is so complicated for the first time homebuyer, and the jargon that needs to be learned doesn't help either. Going to a broker is what i would recommend. For your second home, it might make more sense to "go it alone".

haras_n0sirrah

A number of us who post here are mortgage brokers. We are recognisable by our signatures.
If you don't have a broker and want to approach one of us then read the boards and see who you feel gives good advice and send a pm. Most of us are happy to respond to pm's asking for advice but we are not allowed to approach.

amnblog

That credit card debt could have two effects on your situation.
1. Bring down your maximum lending (by about £15-18K)
2. Dent your credit scoring with the Lender
Give the amount you wish to borrow I would not worry about either of those issues as a £150,000 purchase is well within your reach.
On the Bank Statements, lenders are looking to ensure you stay in the black (or within overdraft limits). They also look for anything they do not expect to see, for example a undeclared loan payment. Spending what you get in will not be a worry
As stated above, be smart and use a broker