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Original poster

what do I need to know about getting a mortgage?

67 replies

RavioliOnToast · 21/02/2016 14:24

Me and my wonderful DH would like to look into getting a mortgage. We are both first time buyers.

We are thinking about going to an independent advisor for this? Are there any alternatives or is this what you'd recommend?

In terms of a deposit, we have a bit saved but we're thinking about maybe getting a loan to bump up the deposit, we'd pay less on a loan overall. Can a loan be used for this? We'd only need 5/6 grand.

Any other little hints and tips about buying houses? What to look for when viewing. What to change when going into a new property? (Check Windows and doors etc)

I want to go into this with my eyes wide open and would like some real experiences and advice.

Thanks Grin

OP posts:
FinallyHere · 22/02/2016 13:56

While it seems that having a mortgage would save you a lot every month, you also have to factor in budgeting for the things that you as owners, rather than renters, will be responsible for. What would happen if the boiler broke down, or a window was smashed etc.

You need to save for the deposit, and ideally also for a fund for everything else. If you already have debts, it would make a lot of sense to clear those first.

I rally don't see how many people manage it these days. Its the downside of the house price inflation we have all be thunking we benefit from. All the best, hope it gies well for you.

NameChange30 · 22/02/2016 13:58

Some links for you:

www.entitledto.co.uk (to work out what benefits and tax credits you could get)

www.moneyadviceservice.org.uk/en/articles/first-time-buyer-money-tips (lots of advice for first time buyers)

www.moneysavingexpert.com/savings/pay-off-debts (advice of paying off debts and saving)

Borninthe60s · 22/02/2016 14:01

www.gov.uk/joint-property-ownership/overview

This explains how you can own a property, unless you stipulate the usual choice is joint tenants.

WishICouldThinkOfACoolUsername · 22/02/2016 14:26

There are very few lenders who will lend if you have an outstanding default, however I will PM you with more information (certainly don't want to out myself regarding this particular topic!) about a lender who may be worth considering.

Original poster
RavioliOnToast · 22/02/2016 14:46

AnotherEmma, we get 80 per week in CTC and 120 a month in CB. A lot of people I know who claim to be in a better financial situation than we are are actually getting a lot more than we do.

Thankyou Wish

I'm compiling a big list of who to talk to etc, and think it may still be worth speaking to a broker and they can give us more specifics on what we need to do re. financial situation.

Although we are married, would it be an option for DH to be on the mortgage himself, and not factor me into it?

OP posts:
Littleelffriend · 22/02/2016 14:47

Sorry to say I think you're going to struggle to get a mortgage based on what you have told us. Lenders are much tougher now than they used to be, and your DH's low salary, your outstanding debt and low deposit mean that I think they will say no.

NameChange30 · 22/02/2016 15:01

"A lot of people I know who claim to be in a better financial situation than we are are actually getting a lot more than we do."

That doesn't surprise me. You may well be entitled to working tax credit, housing benefit and council tax reduction as well. Check with entitledto (link above) or CAB.

And I agree with Little. That's why I said you should look at paying off your debts and saving first. And one or both of you getting a higher paid job if you can.

SheHasAWildHeart · 22/02/2016 15:55

As others have mentioned above, London and Country really helped me recently when I remortgaged and I didn't have to pay them anything. They explained everything to me and the different options available so I never felt pressured and I was really happy with the deal they found me. And I've always found MSE forums to be full of useful advice.

BrindlePirate · 22/02/2016 15:56

Someone else recommended London & Country - call them as they'll take your details and have a chat with you but they don't run any credit searches until you've had an offer accepted on the property you're looking to buy and it's all fee free (the lender pays them a commission when the mortgage completes but they don't charge a fee on top of this)
many of the estate agent's advisers work from a "panel" of lenders and charge an additional fee.

You will be declined by most lenders if the deposit is coming from a loan. Only one lender accepts this.

www.landc.co.uk/

even if "logically" it works out better to get a loan and pay that and the mortgage, the lender won't agree. Also your financial dependents will be taken into consideration for the lenders affordability as well.

DiamondStuddedFlunkie · 22/02/2016 16:12

Mortgage lenders have really tightened up in the last 18 months.

Halifax are the most lenient lenders. They have mortgage advisers who will help you through the whole process, don't pay for an independent one.

DiamondStuddedFlunkie · 22/02/2016 16:15

Halifax also take your tax credits & child benefit into account when calculating how much you can borrow, not many others do this.

SheHasAWildHeart · 22/02/2016 16:20

But won't a Halifax mortgage broker just recommend Halifax mortgages?

Gwenhwyfar · 22/02/2016 18:34

"If you can [not] save £5k you haven't a hope of paying back a six figure sum."

Can you explain that streetcar? It doesn't make sense to me. Saving 5k on top of paying all your other expenses is really difficult, paying a mortgage would be less difficult because they wouldn't be paying rent at the same time.
Later on in the thread, OP gave the house price as under six figures.

BindiBarbarella · 22/02/2016 19:06

Ravioli - I too am a first time buyer and am currently going through the mortgage process.

From my experience I would really recommend going to a broker. Ours has been great so far and really explained the process to us and what to expect. If you get an experienced one, they will know the market really well and will analyse your details to decide which lender is most likely to accept you. In that way you are less likely to be declined (which would leave a footprint on your file).

It is very strict at the moment. I would recommend waiting a while and paying off your outstanding debts. You need to declare any debt you have and they will factor it into your affordability. Some will see it as mismanagement of your earnings/living beyond your means etc.

I know this is easier said than done but securing a job with more regular hours will probably really help too. When were first thinking about buying, around this time last year I was on maternity leave and I didn't have a job to go back to due to relocating. I was considering being a SAHM but we found that even just earning 5k per year meant that we could borrow an extra 50k and make it more likely for us to be accepted. 2 people earning is less of a risk to a lender as if one of you were made redundant, you could still pay the mortgage.

Sorry for such a long post - good luck, it can be very frustrating trying to figure out what the best move is.

Original poster
RavioliOnToast · 22/02/2016 19:28

We have a family member willing to gift us 10k. This would cover 10% deposit and fees etc.

What kind of process will this entail? I think someone up thread said that the 'gifter' needs to sign to say it isn't a loan etc

OP posts:
Teaandcakeat8 · 22/02/2016 19:31

As far as I'm aware you just need to declare it to your broker/mortgage company/solicitor and they will make contact with the family member to obtain what they need.

Not sure if there's a maximum that can be lent to you though?

BindiBarbarella · 22/02/2016 19:36

They will need copy of their passport and a paper trail going back 3 months to show where the money came from - to check it's not dodgy/laundered etc

MisForMumNotMaid · 22/02/2016 19:42

You and your DH can each have a help to buy ISA. In month 1 you can each put £1200 in. Then each month you can put £200 each in.

So £2400 invested in month 1 (which gets topped up to £3000) then £400 each month afterwards (which gets topped up to £500)

If your relative will gift you the £10k, would they start the gift rolling now so you could let it grow in the ISA whilst your looking around. 6 months to a year slip by easily when you're in the house buying process and that could add a nice sum to your deposit pot.

Original poster
RavioliOnToast · 22/02/2016 19:51

I had a look at a few websites earlier about the isa. Do you have to pay the government 'bonus' back?

OP posts:
Sunnyshores · 22/02/2016 20:24

Another vote for London and Country, they were excellent and dont charge a fee.

You dont have to pay for credit referencing, Noodle and Clerscore are free. Theyre about a month behind Experian, but if your credit doesnt change much they will be accurate enough.

Your lack of deposit is the problem, in theory the wages are OK, but that doesnt seem to matter so much these days.

MisForMumNotMaid · 22/02/2016 20:38

If you use the house buy isa to buy a house then there is no need to pay the bonus back. If you withdraw the cash from the ISA for any other purpose you can't take the bonus.

maybebabybee · 22/02/2016 20:45

It's really not that easy to get a mortgage approved in my (very recent) experience. We only just got one and we earn approximately 110k between us, have no debt whatsoever and have a deposit of around £50k. We still didn't get an amazing deal because our deposit is 10% (we were looking around the 350k mark).

Can't RTFT properly on phone but it would be extremely counter productive to get out a loan to bump up your deposit. Would also affect your affordability (sorry this has probably already been said).

maybebabybee · 22/02/2016 20:46

oh just seen comments re: London and country - DP and I used them, they were totally fab.

silvermantela · 22/02/2016 21:17

ravioli - no, the isa is completely 'catch free' in that regard - look on it as just a particularly high interest rate.

Most of the other government H2B initiatives you will have to pay back at some time point though, e.g. the one where you pay 5% deposit, government covers 20% then you get mortgage for remaining 75% - after a few years then you will be in the position where you are paying back the 20% loaned deposit plus a small-ish rate of interest in addition to your mortgage. There are also further conditions on different initiatives, e.g. some only apply to new builds.

However the ISA is the one that I think anybody even thinking about buying a house in the near future should get. Even if you only have it for the minimum 3 months you get £400 free money plus your normal interest, or you could keep it going for years to get up to £3000. Even if you change your mind and decide not to buy a house you still have all the money you've saved plus interest, just not the additional bonus. More info at www.moneysavingexpert.com/savings/help-to-buy-ISA,

Martin Moneysaver's full mortgage guide for first time buyers is helpful
www.moneysavingexpert.com/mortgages/mortgage-guide

Gwenhwyfar · 22/02/2016 21:31

"Even if you only have it for the minimum 3 months you get £400 free money"

Do you? I thought you only got the bonus when you actually buy a house?

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