Mortgages and unused credit cards

samps1973

Hi,
I have another thread about obtaining my first mortgage but thought I'd keep this separate.
I was in debt for some time and done a bit of credit card hopping to get the debt paid with as little interest as possible. However I never cancelled any of the cards that I hopped from.
In the passed I had a credit builder credit card with about £500 limit on it..I now have over 8 cards £58,000 credit and a £0 balance. It's nice to have it there and card hop if i need it and for emergencies but at the moment I'm trying to get a mortgage. 
Will the amount I am offered be directly affected by the unused credit?
I need roughly £150k - £160k
Although I know that an AIP isn't set in stone, I have been offered an AIP of £141,000. I know this figure can go up or down. With a deposit I will have what I need but i would feel a bit more comfortable if i had a bit more as a buffer and wondered if getting rid of some of the credit available would do that.

Thanks.

ACG

The amount you can apply for is affected by affordability. 
Having £58k worth of available credit is not going to affect that, but it may affect the outcome of your application. Nobody really needs that much, appreciate it is nice to have available, but you could presumably have 3 cards with £5k limits on each and still have what you need - ie options and an available amount. 

I do not know what the repayments would be on £58k but it is probably not far off a monthly wage for a lot of people. An underwriter might have concerns about that which the DIP does not pick up on. 

moneysavinghero

I used to have a load of unused credit cards that i took out to get the freebies that came with them. The mortgage provider questioned why i had so many but were happy with my answer and i got the mortgage. But i have never been in debt, it might make them more nervous for someone who has previously got into debt to have access to so much credit.

Why not cancel all but one of them.

samps1973

I cancelled a couple of them today. I'm going to keep 3 incase of an emergency. As I'm hopefully going to be moving my credit will be affected because my electoral roll info would have changed and it will take a couple of years to settle. I'll just keep the ones with the longest money/balance transfer times.
Thanks 👍

samps1973

I have another thread as I wasnt sure whether to go the shared ownership route or because of my age the 100% mortgage route. With the help from the guys and a bit of research 100% is definitely the way forward. 
I'm able to get a mortgage for about £140k AIP with my bank and feel comfortable going with them as it's easier. It may not be the best interest rates etc but it gets me on the ladder and I can always remortgage with a good broker in the future. I've had a look around and I can get a 1 bed flat for that where I live ( Reading) so I'm pretty much at the stage of being able to view properties I think. I know to get one with the highest lease. 
The only thing I'm a bit confused about is the next steps. Valuation fees - solicitors fees and everything else you have to do. Is there a go to place I can find information about how to do it and in what order. I'm happy with my lender so don't think I need a mortgage broker.

I'd feel a bit stupid going to view properties with no knowledge and I don't want to waste my or other people's time. 
I was originally going to use L&C but they said I can't speak to an adviser for a week and seem very busy. Someone said find another good independant broker but as I mentioned earlier I'm happy with the lender.

Any thoughts or help will be very welcome.

Thanks

K_S

samps1973 said:

The only thing I'm a bit confused about is the next steps. Valuation fees - solicitors fees and everything else you have to do. Is there a go to place I can find information about how to do it and in what order.

@samps1973

- If the product you are applying for has a valuation fee, it will be clearly mentioned in the illustration and will need to be paid upfront at the point of application by card.

- Solicitor's fees are usually collected at the end of the conveyancing process and usually will need to be paid by bank transfer. They will collect some money upfront (usually a few hundred pounds) to pay for things like searches, etc.

A comprehensive list of all potential costs involved in buying a house are in the guide here https://www.moneysavingexpert.com/mortgages/mortgage-fees-stamp-duty/ Not all of them will necessarily apply to every transaction.

samps1973

@K_S
Thank you very much for the advice and link. 

I have been looking into all the fees today. Headache 😳 but at least it's done.
Some of the info I got from the link above and some from my lender.
In total the fees will be roughly £1800 - £2000 That includes everything including the conveyancing fees and an upgraded survey from the lender.
The solicitor and all the stuff they have to do is about £1000 -£1250.
The lenders valuation fee would normally be including admin £248 but with the upgraded Building survey it will be £716. I'm not sure if that's a good price or not. I have to pay the £248 anyway so it'll be another £468.
I might look into cheaper prices elsewhere so that I can get the survey done at the last minute.

Is it worth getting the extended survey or just have a look myself and check for damp etc?

Thanks

Anyanka1

Hi again, John.  That depends entirely on how confident you feel about spotting problems.  For instance, especially if viewing a top floor flat, how would you feel about taking a ladder with you and looking into the roof space, assuming it were even accessible?  I would not dream of buying a house without getting someone to do that and OH's loft-looking days are behind him, unfortunately.  When we were last looking, nearly a decade ago, he climbed like a squirrel but none of us are getting any younger.

I will tell you what I usually advise:  If you can find a builder willing to come and look at a property with you for very little money, nab him!  Surveyors, in the main, will not attempt to access anything that requires any effort on their part. Their reports are littered with "get out" clauses and their estimations (if given) of any remedial works required will be inflated if not ridiculous (I temped for one, once upon a time, and he was one of the better ones, I think)

Any builder worth his salt will not be afraid to climb into lofts, take up drain covers etc. and bring the means to do so with him.  He will also offer more realistic estimations of what any works would likely cost as this is his job.  Surveyors are neither builders, electricians nor gas engineers and their reports reflect those facts.  Sorry to go on for so long.

ACG

If you know a decent builder, it can be a good idea to take them but you still may need or want a survey. 
If you dont know one and you want a proper review of the property - get a surveyor. I have come across a lot of tradesmen over the years and only a fraction of them would I go anywhere near again. 

Surveys do have a lot of backside covering in, but at the same time if they miss something major that they should have picked up on - you are covered. Bob the builder wont be covering your costs for buying a dud property - no matter how many sets of ladders he climbs. 

samps1973

It's a shame, I used to know a couple of really good builders but have lost touch over the years. I think I read somewhere if the building is over 50 years old it's worth getting a full building survey but if less than 50 years the survey just above the valuation survey will do, it's about another £180.
I guess it's a small price to pay on a major purchase. I've read a few nightmare stories and don't want to be in the same boat. 
It's good to know that that my back would be covered if things had to go to court for major problems that they missed.

Thank you 🙂

samps1973

I've been a bit worried today thinking about the future and a long term mortgage. I'm sure everyone does it at some stage.
Including overtime I earn £35000 and my job is very safe however things can happen over time. Due to the nature of my job I would find it difficult to find a job with the same salary.

Im going to get a repayment mortgage. My lender said that if I payed extra each month it wouldn't lower the term, so I'm guessing that the monthly amount to be paid will start to come down as the extra payments I make come off the capital over time, is that right?
If that's the case then I could afford to earn less and not worry in the future. Also I'm guessing I'll eventually be able to pay off with any equity made on the property? if theres any.
I found out today that I wouldn't be able to get cover for redundancy/Unemployment due to Covid and as we all know things can happen.
Although moving into my own home is amazing I don't want leave any stone unturned if I can help it.
If I've missed any stones, could you let me know 🙂

Thanks
If eventually it figures out that I will be better off renting then so be it but if I can buy my own place and have property independence then all the better.

Thanks guys 👍