Advice

mrjaffa

Hey everyone.

Me and my girlfirend are looking to buy as we are currently renting. We are first time buyers, she has poor credit and mine is fair. Where should we start? We're both complete strangers to mortgages and how they were work. I understand that we probably can't get a 100% mortgage but who should we look to for advice? Are there companies that we can go to who can look at our situation and advise the best way forward? Or can anyone on here advise the best process?

Thanks for any help.

_Andy_

Hi

What sort of 'poor credit' - could you provide a bit more detail?

Thanks

lynnexxxo

I'd suggest you start saving as much as you can for a deposit.

Conrad

Forget 100% mortgages and even 95% are an increasingly rare breed.

mrjaffa

My girlfriends credit is poor as she has been late with a number of payments over the last year, but certainly no CCJ's. Mine is only fair as I have a lot of credit (£3000), spread out over a number of store/credit cards (all of which have been regularly paid over the last 12 months).

I have just spoke to Alexander Hall, the mortgage advisors, and he said forget about 100% mortgage. Best bet would be to get a loan for deposit, even at a high rate which is all I'll get, use that to get a house and then can take a secured loan at better rate to pay that one off.

We need to really buy soon as my girlfriend is going back to uni at the end of the year, so once she is a student, we won't we be able to get as much for mortgage. We know if we can get a mortgage before she starts studying whilst they take into consideration her earnings, we'd still be able to afford mortgage payments when she is a student.

lynnexxxo

MrJaffa, hi, as your new here let me expand on some off the answers.

Basically what we are all telling you that unless you have a 5-10% deposit you are not going to get a mortgage at a decent rate, especially if your credit history is less than prefect. You may find some lenders willing to give you a big mortgage but they will charge a big rate.

Also the new builds offering you 5% deposit/£500 a month to your mortgages are not builders being nice, the properties are overpriced.

The worst situation - you buy a newbuild apartment with all these incentives from the builders. Half the block is bought by buy to let landlords. These new landlords discover their apartments are not renting so easily, and become less picky about who they rent to, and you end up with the neighbours from hell. You can't sell you apartment for the price you paid, and either are stuck living there or end up owing thousands in negative equity.

Good situation. You start saving (see debt free wannabe and old fashioned moneysaving for tips) and get yourself a 10% deposit. You are in a good position, not in a chain and can put in some cheeky low offers. at the same time as saving, you pay off any existing debts on time and improve your credit score which in turn gets you a good interest rate for your mortgage.

beecher

Can I ask why you're so desperate to buy somewhere now? Are you sure you'd be able to afford the mortgage payments, loan costs and credit card repayments while your girlfriend is a student? Sounds like a bit of a gamble, particularly when many are advising that prices may well come down. With not so good credit ratings you'd be unlikely to get a very good mortgage rate, and I'd be concerned about getting into negative equity very quickly.

Any possibility of you just saving until your g/f ends her degree, clearing your debts and getting a deposit together?

lynnexxxo

I was writing my last reply as your were posting.

What you are considering in not really a very good idea.

Would it not be far better waiting till your girlfriend has finished uni to buy somewhere? Even the most optimistic outlooks are that property prices will not really increase much in the nesxt year or so, so its unlikely that you will be priced out of the market.

Are you sure you could afford the mortgage payments AND the loan for your deposit AND all your other debts?

Often renting will be cheaper than the mortgage payment would be if you bought the place.

jill2002

Mrjaffa,

You have to ask yourself why would the mortgage lender not lend you so much when your g/f is a student - it is because they feel it would not be affordable. It's not usually because they are being awkward. Yes, they want to make money out of you, but they also have to be responsible lenders and the last thing that they want to do is repossess your property.

I think that you may find that your credit history is not that bad, if what you say is correct - don't automatically expect a bad rate - but as those above have said - you will get a much better rate with a deposit. Go to see someone who has direct access to the Underwriters - it would be great to go to a whole of market broker, but they usually don't have direct access to the underwriters to plead your case.

herbiesjp

jill2002 wrote: »

Go to see someone who has direct access to the Underwriters - it would be great to go to a whole of market broker, but they usually don't have direct access to the underwriters to plead your case.

Not quite sure what you mean by this?

Are you equating whole of market advsier to not having access to underwriters, but tied adviser do have access?

Not sure I understand the point.

jill2002

I mean that the broker usually puts the business through to a lender via a packaging unit and is not usually able to speak one to one with the underwriter of the case.