Excited to buy, but cannot get a mortgage agreement in principle, looking for advice...

Thrugelmir

Have you both opened cash LISA's? 

hazyjo

I'd stick with the highest credit card limit. You need to quote you're creditworthy. They have no proof. I would've thought a higher limit would be in your favour. Just make sure it's paid off every month and don't be tempted to max it out. One miss could set you way back.

Natrc

hazyjo said:

I'd stick with the highest credit card limit. You need to quote you're creditworthy. They have no proof. I would've thought a higher limit would be in your favour. Just make sure it's paid off every month and don't be tempted to max it out. One miss could set you way back.

I think this fear of the "one mistake" with a credit card is what has foolishly put me off getting one for so long. 
Thankfully I am very sensible, so I will set up a direct debit and only use it for everyday purchases like food/fuel for the sole purpose of building up my credit score. I will actively avoid any big purchases, and will not see it as free money. 

Im just worried after something my broker said today. He said "if you had come to me 12 months ago looking to get a mortgage in a years time, I would have told you to get a credit card" - when i mentioned to him that we may just halt looking for properties, save more and look again in 6-8 months time, he said I should remain cautious as a credit card within a year of a mortgage application could hinder my score. Is he being overly cautious? or could this really have a negative impact and so I may as well not get one?

Natrc

Thrugelmir said:

Have you both opened cash LISA's? 

Yes, we both currently have £5k each in the accounts, and are currently about to put a further £2.5k each into them. Why is there an issue with them?

Mrsn

OP I can absolutely understand your enthusiasm for wanting to push forward with it and the disappointment you might have felt. For the sake of a little bit longer to get a more stable financial history in place it will be worth it, keep your eyes on the bigger picture.

Thrugelmir

Natrc said:

Thrugelmir said:

Have you both opened cash LISA's? 

Yes, we both currently have £5k each in the accounts, and are currently about to put a further £2.5k each into them. Why is there an issue with them?

Not at all. As FTB's the easiest way of boosting your savings.  The deposit and funding the initial costs is your biggest challenge by the sounds of things. That's the best place to focus your efforts. Your credit history will naturally build over time. No magical acceleration. 

Natrc

Mrsn said:

OP I can absolutely understand your enthusiasm for wanting to push forward with it and the disappointment you might have felt. For the sake of a little bit longer to get a more stable financial history in place it will be worth it, keep your eyes on the bigger picture.

Thank you, I think the frustration comes from wanting to buy for so long. We have been saving slowly for 3 years now (even if we couldnt save very much up until recently because I was a student). I am sick of meeting the family and having the same lecture about getting our feet onto the property ladder because we know, we want to so much, but we just keep falling at every hurdle. Now we finally have the money, but another hurdle (which we didnt think to anticipate as we were so focussed on saving) have come up, and we are knocked down again. In the grand scheme of things its very minor another 6 months to 1 year, but for me, over the next 1-2 years I want to start a family, and I am coming to a very difficult decision making point in my career, it would have been niced to be settled in a property before all this happened. I also keep hearing horror stories of people starting looking and taking 1-2 years to get into their purchased property due to delays, legal issues and chain issues. Our current property isnt suitable for a child, and moving with a small baby (and two young cats) just sounds like a complete nightmare. I may sound like im thinking to far ahead, but for such big life decisions like getting a house and mortgage, i need to consider all of these things. 

I will keep my eyes on the bigger picture, and keep my mind busy on saving and planning. Im trying to better organise our finances, cut down on spending and optimise us to get accepted. it will all come into place soon (hopefull). 

katkatmachine

Hey just want to cheer you up and say that you guys can do it! It’s just a little set back for now but in no time you’ll over come it. Also, at such a young age of 24 you are already thinking of getting a house. I wish I thought of that when I was your age. Hehehe. Good luck. 

Natrc

Thrugelmir said:

Natrc said:

Thrugelmir said:

Have you both opened cash LISA's? 

Yes, we both currently have £5k each in the accounts, and are currently about to put a further £2.5k each into them. Why is there an issue with them?

Not at all. As FTB's the easiest way of boosting your savings.  The deposit and funding the initial costs is your biggest challenge by the sounds of things. That's the best place to focus your efforts. Your credit history will naturally build over time. No magical acceleration. 

Thank you - yes the LISA has really helped. By the end of August (according to my calculations) we will have £20k combined in the accounts, meaning we will have gotten £4k in government bonus. It sounds like a little, but its a massive help as finding that £4k on our own would mean around 4-6 months of further savings. I reccomend them to everyone I speak to about buying as a first timer now. 

Would you reccomend putting more than £20k in? Obviously we are looking in the £125-£200k range (and most properties we like are between £125k and £175k depending upon location). We know the money can only be used towards the deposit and not for fees or other things, so would it be wise to put any savings over £20k into another account for now for fees and rennovation/moving costs? I dont want to be in the position where we buy a property, have put all our savings into the LISAs, have a great deposit but have no money leftover for moving/fees/renovations. Does this sound sensible?

[Deleted User]

I've not read all 3 pages but is the main issue your lack of previous credit?  And your husbands 3 month in current role? 
If so then there is a lender who returned to even 5% lending today who:
1. Don't credit score applications.  As long as you haven't got bad history then they don't care if you have no credit history. 
2. Don't have a minimum term in current employment (although they will want probation to be passed)

What lenders did this broker approach before saying you couldn't get a mortgage?  How many lenders did they have access to?