When to apply for mortgage?

[howwillthispanout]

Well 2018 is (fingers crossed!) going to be the year that we buy a home. Although we have bought before we have been living abroad and out of the loop for over 12 years so am looking for some up to date advice and handy hints please.

We have steadily saving for a 10% deposit - we should have the "full amount" for this saved by April.

I am also steadily paying off the only loan we have - £5K - which will be paid in full in April.

Credit cards (two) are now at zero and only used occasionally and paid off in full every month.

Overdrafts on our two accounts (one in my name only) and one on a joint account - are both at £500 but we could reduce with one month's salary and have money left.

So...

Due to a variety of reasons we want to go through a mortgage broker - when do we contact them?

Is it once we have everything in place or could we do it now?

Do we have to have everything saved and/or paid off before we approach anyone?

When is the credit check carried out?

When should we start being more sensible/frugal with monthly spends?

When should we start looking at properties? Will this be when we have a mortgage in principle?

I'm really worried that after getting this far that I will mess up and anxious not to spend another Christmas in rented accommodation!

Any advice would be greatly appreciated - thanks

You find a house first and then get the mortgage sorted.
You could talk to an IFA in advance if you want help working out what you can afford

And now is the time to start cutting down on monthly spends I think! Or min 3 months before you apply, sadly. On the plus side it’ll boost your savings pre purchase.

Are you outside the UK now? If so, you may have problems getting your credit history transferred, I think you need to take advice on this, and even need a back up plan of a mortgage guarantor lined up?

When you're ready to start viewing, contact a broker for an agreement in principle as this gives an indication that you're not likely to be a time waster to potential vendors. This doesn't involve a full credit check. Once you've made an offer, then you can apply for a mortgage. This is when a full credit check is carried out and affordability assessed and so on.

Definitely start cutting back now on the spending as they look at last 3 months. It wouldn't hurt to see a broker now and they can start talking you through what you can afford and what sort of deals are going to be right for you.

Good luck with the house hunting!

Sorry this may not be of any help at all as we went entirely through building society but some elements may be the same?

We started looking at houses before getting a MIP, but there was really no point as we didn’t know exactly what we could afford and if we’d seen something it would have taken longer to get everything sorted.

We got a check carried out early so we could move forward quickly when we found a house, but that turned out to be 3 months after the initial check so had to get another.... the credit check once we’d found the house we wanted only took a couple of days so didn’t hold anything up at all.

It’s best to wait until everything paid off, as we applied 2 months before a loan was due to be paid off and it reduced the amount we could borrow by £20k (there was only about £500 left on loan!). We didn’t have to show proof of deposit until applying for the actual mortgage though, after our offer was accepted on the house.

Hth!

Thanks All!

No we've been in UK for past four years (well I have anyway!) - so that's not such a worry.

I had a big promotion last year which has made it possible to even start thinking about buying which is great! If not we'd be still in limbo as our family home is abroad and just not selling at all (despite lots of price drops!) DH has now been in UK for 2 years and is working so that helps. All DC are now grown.

I think we'll get a few more pennies saved and a good run on credit ratings and then make an appointment for adviser.

Big estate agents have financial advisors so could talk to one of them for some general advice. Pay off your loan and put some spends on credit cards which you then continue to pay off in full. The mortgage companies need to see that you can pay on time and credit card bills are a way of showing this. Beat wishes for the house purchase.

Ditch the overdrafts, lenders don’t like them as hey are a sign of not being able to live within your means.

You could talk to a broker now, especially if youre keen to start looking at properties. I'd recommend someone who can see you face to face, is whole of market and definitely one that will not charge you a fee (check the terms of estate agent brokers a friend of mine recently got stung this way).
If loans will be paid off etc tell them that and it will be on that basis, then they will give you an idea of what you can borrow.
Well done on the promotion and everything crossed 2018 is your home-buying year!

Wait until the loan is paid off and it shows as settled on your credit file.
Approach your broker for a decision in principle before starting to look at houses. A credit check will be done at this point and it will give you an indication of how much you can buy.
Cut out all unnecessary spending now as your statements and expenditure will be assessed when you apply.
If your overdrafts are being used get them paid off. It won't hurt having them there unused.
Check your credit files for any discrepancies.
Make sure you are both on the electoral role.
Do not incur any bank charges or have any other credit checks carried out.