Mortgage - Affordability vs Credit History

celesp

ACG said:

celesp said:

ACG said:

I think the AIP with L&C is a glorified affordability calculator only - but I could be wrong. 
I would speak to a broker, I have no experience of L&C personally reviews on here are mixed, some swear by them, others want to swear at them. 

Get everything discussed so it is based on your actual circumstances rather than a generic affordability calculator. 

This was a concern, I was not sure how they did their checks and on paper, any couple on good wages is going to be accepted without looking at history.

Does anyone have any good suggestions for a broker? I have looked at the broker's list on the main MSE site but most seem to want instant applications, as we are not buying until March/April now, I think it would be better to talk to someone to ask what positive steps we could make moving forward in the next x months and what Lenders are likely to lend to us now and what we should be aiming for in 6 months or so.

Many Thanks

Your adverse is not the worst I have seen. I would like to think if you got a good experienced broker most would be able to place it. 

Maybe just see if they head straight to the specialist lenders or not. If they do, it might be worth getting a second opinion. Thats not to say you wont end up there, but there is potential for something better from what you have said (but the devil is in the detail). 

I had spoken to the Mortgage Advice Bureau earlier today. We were told we would be applicable for most lenders as we have not had any defaults in over 3 years, and the few we did have in 2018/2019 were communication providers which were excluded from half of the panel. The did not seem to care at all about the CCJ as it was settled. So we were told although it's not the best credit, it's more than good enough to get a good mortgage rate with a high street bank and our affordability passed easily. 

The only letdown was that apparently, for the amount we are borrowing as FTB most high street banks will require 10% minimum (we only have about £7k Saved now), We can save another £12k - £14k by March / April but it still won't be enough for 10%. We would need £32k, not £16k like we were hoping and can achieve. 

I asked if we could pay 5% with a subprime and pay them a rate that makes them a good amount but apparently, they usually want 15% as a minimum.

there were a couple of 5% we would have been eligible for if we had accounts with those particular banks for a certain period of time, paying in also I guess, but that is still not enough time for us to meet the Landlords request to sell in April.

We did talk about downsizing and buying cheaper but that's not really an option or at least not too much. We would possibly get 5% on a property at £240k but you will only get 1 bed flats here for that and that is not realistic for us for many reasons.

So it looks like it's going to be another round of finding somewhere else to rent and hope we don't get another no-fault eviction after 6 - 12 months so we can have some breathing room to save up!

Bigphil1474

OP, it's 6 months until the start of April - if you've got £3k a month spare added on to your £7k, then you shouldn't be far off. Cut back for 6 months and chuck everything you can into savings, maybe have a clear out and sell all your junk you don't need, and you might make it. I think it would be worth making that effort, and far better than being on the rental merry go round in my opinion.

celesp

Bigphil1474 said:

OP, it's 6 months until the start of April - if you've got £3k a month spare added on to your £7k, then you shouldn't be far off. Cut back for 6 months and chuck everything you can into savings, maybe have a clear out and sell all your junk you don't need, and you might make it. I think it would be worth making that effort, and far better than being on the rental merry go round in my opinion.

So I think MAB was just reading criteria to me and not checking with any lender directly. I have spoken to one broker who deals with Kensington Mortgages directly, and they have said they will speak to Kensington today but very likely accept 5% due to our affordability. Obviously a higher interest rate.

Looking at finances last night we can most likely save up £18k altogether, that's not taking into effect Solicitor fee's, survey though. Can I pay for these on a credit card?

It looks like there are lenders out there that will accept 5% for our conditions, we just need to find the right broken who is willing to put in the work and ask the lenders. But as its March/April, I do not want any AIP or checks being done now, only a look at our checkmyfile report, wage slips etc as things will also have changed by then.