Aibu to be so worried about buying first house?
Samjazz · 17/07/2015 00:42
Recently married, been with DH for 7 years, hoping to buy first place soon and try for our first baby as soon as we move.
I am so worried about whether we'll be accepted, based on some debts DH has. He has £15,000 on a secured loan which he consolidated and pays £300 per month off this. Unbelieveably, his credit rating is very very good (even better than mine and I have absolutely no debt). I have a "good" credit rating. Neither of us have ever missed a payment.
Due to the area we wish to move to, we are looking at properties valued around £260- £300k. we will have approx a £28,000 deposit by January, the time we wish to buy if we manage to secure a mortgage.
Our salaries are ok - I earn £42,000 (due to increase to £55,000 in August) with a 15% annual bonus. DH earns £34,000 and works in sales. Some months he makes about £1,500 in commission but on average he earns about £800 in commission. I appreciate that comm is often not included in mortgage consideration.
Aibu to ask if I am being totally unreasonable in hoping we will be accepted with DH debts (additionally he has a car on finance but we can always get rid of this. It's a v v good industry deal and we only pay £200 pm for this).
I have not enquired at the bank about this so im totally clueless. Is the help to buy scheme feasible? Help!
Qwebec · 17/07/2015 03:17
I don't know if you have those in the UK, but we dealt with a mortgage adviser. He does not work for a specific bank, but shops around to find the best deal that will suit your needs. It was great, makes the whole process much less stressful. Check you finances and calculate how much you can afford to spend. IME the back always offers moe loan than what makes sense financialy once you deduce monthly expenses, taxes and repair fees.
Try not to get yourself worked up. Ask the bank, and if they refuse, use the extra time to save towards a bigger deposit.
RoboticSealpup · 17/07/2015 03:39
YABU. You actually have a deposit. That's a pretty good place to be. DH and I won't have that for years, and I worry about renting for the foreseeable future, with a small child. If I had £28.000 I'd be laughing. Just trying to give you a slightly different perspective!
HicDraconis · 17/07/2015 05:21
I wouldn't worry about the existing debt affecting whether or not you'll be approved, but I definitely would take the repayments (£500 per month of loan and car) into account when you are trying to work out affordable mortgage payments.
I'd also look at whether you can afford loan, car and mortgage repayments while on mat leave, look at what sort of maternity package you will get and discuss who will return to work, on which hours, childcare etc before you TTC.
Having £28k savings and a debt of £15k is a daft use of money generally as you normally pay more in interest on the debt than you earn from interest on savings. I'd consider paying off your DH loan first and then building up a deposit, or rolling the £15k into the mortgage.
Definitely suggest you talk to an independent advisor though, plus negotiate the best deal you can in terms of rates and repayments.
FirstOfficerDouglasRichardson · 17/07/2015 05:35
Don't worry too much, they will take the repayments for the debt into account and it may effect how much they will lend you got the mortgage but they will still let you have a mortgage. His credit rating is very good because he has debt that he is repaying and repaying 'well' iyswim? People with no debt, no loans, no contracts they are repaying on often have no credit history or poor credit because there is no evidence they can repay even though they may have 100K sat in the bank.
Cherryblossomsinspring · 17/07/2015 08:25
I think you sound ok but you may get refused by a couple if places. I'd be confident you'll get a mortgage somewhere. They won't take your pay rise into account unless it's already in a contract and likely won't take commission. But despite that you are still in pretty ok shape. Just get sorted soon as the news is the central bank are putting the rates up!
Hellionsitem2 · 17/07/2015 08:35
Are you both planning to work full time after you have your first child? Nursery fees are expensive and the alternative of having a stay at home parent reduces income. You won't know how you feel about leaving a baby till after it is born.
Id probably look about the £260 mark, no higher. Our mortgage is 4 times our salary and we feel the pinch!
ChristmasZombie · 17/07/2015 08:42
I think you'll be ok getting a mortgage offer. We got turned down by all the highstreet banks because I'm a "low income earner" (I'm a teacher...), but Tesco Bank gave us a small mortgage (90k). Debt that you are managing seems to be less of an issue than earnings.
Someone suggested using your savings to clear the debt. I think that might be a wise move, but only if you know you can build your deposit back up. Being able to offer a decent deposit makes you a lot more appealing to banks.
Hellionsitem2 · 17/07/2015 08:50
We are now planning to move to reduce our mortgage to a more comfortable 2.5 times our income. A mortgage four times our income to me means living on lentils, second hand clothes, camping holidays in the uk, limited meals out and limited Xmas money. I quite like living like this but feel the weight of our mortgage debt hugely.
19lottie82 · 17/07/2015 08:57
firstly ignore the "good" and "very good" credit "ratings", they don't even exist to anyone apart from you!
A lender will generally look at what existing debts you have and if you have any "black marks" on your credit history like late / missed payments.
Everything sounds OK, but a lender will take into account your existing commitments when they are calculating how much they will lend you based on affordability.
I'd go and see a mortgage advisor, as already suggested.
If help to buy in not an option you will need a minimum of a 10% deposit plus £ for fees (about £1-1.5k IME), so you might want to save a little more than £26k if you're looking at houses up to £300,000.
User100 · 17/07/2015 09:44
YABU to ask mumsnet for financial advice. I'd have thought you'd be fine but I'm not a mortgage adviser so I really don't have a clue. I would say you need to approach this the other way round though - go to mortgage adviser, aka what they can lend, what repayments will be and the set a budget.
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