Looking for advice, for a first time buyer

Aberlourj

Hello!

I currently have some money saved in a LISA (£10,000 which includes 2 years of £1000 bonuses). The LISA has been open for under a year (I opened it in May last year, but didn't deposit anything until December, and Moneybox says that the first deposit counts as the opening date).

So this would mean I have £8,000 (minus the fee) which is enough for a 5% deposit on a new build property nearby which I am interested in buying through HTB equity loan.

What would my chances of securing a mortgage be if:

- I have £36,500 yearly income from my job.
- About £150 a month loan repayments
- about 10% usage of credit limit of credit cards (I generally pay this off to 0 every few months)
- £185 car finance and £135 student loan.
- a four year old CCJ which has been satisfied for a year (credit card).
- a 3 year old CCJ which has been satisfied for a year (telecoms).
- one default that is three years old, but paid off (£100).
- no other credit problems at all and excellent repayment history of the accounts that I have open.

I'm not sure where to begin with a broker, the online ones I've tried tend to tell me to try someone else when I mention a CCJ.

Also, how much would I need to save for additional fees before I apply for a mortgage? or will lenders generally not look at the affordability of additional fees like conveyancing, surveying, broker and lending fees?

Thanks!

sociable7

I feel like the best thing for you right now is to give it another 2 years so that your credit report can improve.

I'd recommend doing a mortgage in principle with Halifax. It won't affect your credit file as it's a soft credit search. They'll tell you fi they'll give you one or not. If it goes to their team then it's on the border. 

K_S

@aberlourj Given your CCJs are both 3+ years old, you should have options for H2B products. 

Plug in your numbers on the H2B calculator excel file to see how much you may be able to go up to  https://www.gov.uk/government/publications/help-to-buy-equity-loan-2021-2023-calculator-and-guidance

Aberlourj

K_S said:

@aberlourj Given your CCJs are both 3+ years old, you should have options for H2B products. 

Plug in your numbers on the H2B calculator excel file to see how much you may be able to go up to  

Hi K_S

Thanks for this.

I have put my numbers into the calculator and it looks as though I could apply for a house price of up to £179,800, if I'm right in saying that the debt to income ratio is a max of 45%, which is higher than this house property price.

I'm not sure what's next though. The brokers on the MSE guide tend to bat me away as soon as I mention CCJs.

ukri

The mass volume firms don’t do these kind of profiles. You need to find an adverse experienced adviser who can marry you up to the right lender. Any of the advisers who post on this forum should be able to help if they have time.

grumiofoundation

Aberlourj said:

Hello!

I currently have some money saved in a LISA (£10,000 which includes 2 years of £1000 bonuses). The LISA has been open for under a year (I opened it in May last year, but didn't deposit anything until December, and Moneybox says that the first deposit counts as the opening date).

So this would mean I have £8,000 (minus the fee) which is enough for a 5% deposit on a new build property nearby which I am interested in buying through HTB equity loan.

To clarify you have £8,000 in addition to the money saved in the LISA? 

If not and you intend to make a withdrawal of the £10k from the LISA to buy a house before the 12months is up you will be penalised 25%, so you will get £7,500 from the £10,000

Aberlourj

grumiofoundation said:

Aberlourj said:

Hello!

I currently have some money saved in a LISA (£10,000 which includes 2 years of £1000 bonuses). The LISA has been open for under a year (I opened it in May last year, but didn't deposit anything until December, and Moneybox says that the first deposit counts as the opening date).

So this would mean I have £8,000 (minus the fee) which is enough for a 5% deposit on a new build property nearby which I am interested in buying through HTB equity loan.

To clarify you have £8,000 in addition to the money saved in the LISA? 

If not and you intend to make a withdrawal of the £10k from the LISA to buy a house before the 12months is up you will be penalised 25%, so you will get £7,500 from the £10,000

Hi,

No just the £10,000 in the LISA, I am aware of the 6.25% loss if I buy early, which I can make the difference to £8,000 for the deposit.

FirstTimePlx

Aberlourj said:

K_S said:

@aberlourj Given your CCJs are both 3+ years old, you should have options for H2B products. 

Plug in your numbers on the H2B calculator excel file to see how much you may be able to go up to  

Hi K_S

Thanks for this.

I have put my numbers into the calculator and it looks as though I could apply for a house price of up to £179,800, if I'm right in saying that the debt to income ratio is a max of 45%, which is higher than this house property price.

I'm not sure what's next though. The brokers on the MSE guide tend to bat me away as soon as I mention CCJs.

My apologies, I have not read all of your posts.

I note that the calculator states approximately £180K, however I have similar figures to you (similar wage) and 0 credit cards (not 10%) and also a single loan.

I have just completed a hard check and full application with a mortgage specialist, you are more likely looking at £130K.

Complete an AIP with a bank/broker and they will be able to give you a more accurate figure than a calculator which doesn't take into account all figures. Banks/ also have different lending criterias.

dimbo61

I think the poster opened the Lisa in May 2020 so over 12 months !
So did you pay even £10 to open the LISA ?

Aberlourj

dimbo61 said:

I think the poster opened the Lisa in May 2020 so over 12 months !
So did you pay even £10 to open the LISA ?

Very stupidly I didn't put anything in until December.

I feel like my best course of action here is to keep saving and wait until December.

My worry here is I won't find a new house that meets my affordability as I don't think I can wait long enough to put a bigger deposit down and not use an equity loan.

amnblog

Your credit issues are sufficiently historical that you have a decent change of a Help to Buy mortgage with a mainstream lender.

You do need a Broker however, and not the pile them high sell them cheap auto firms.