Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

Property/DIY

Join our Property forum for renovation, DIY, and house selling advice.

Flip

Original poster

First time buyer - what do I do??

22 replies

itsahardknocklife · 05/02/2008 22:33

I am the sole wage earner in the family. We have seen a house we like - and I mean REALLY like. It is certainly not an expensive house but it is just under 3 and a half times my salary. We would need a 100% mortgage as we have no deposit.
Are we being ridiculous?
Also, how does the process work? Do we put in an offer and then look for a mortgage?

OP posts:

PussinJimmyChoos · 05/02/2008 22:36

Its better to have a mortgage agreement in principle in place before you make an offer as most sellers provide this. However, you could say subject to getting the mortgage, we would like to make an offer blah blah and then get one sorted pronto

Its a bit scary going for a 100% mortgage and no deposit but if you are renting at the moment, the money you pay towards a mortgage is actually doing something for your future, not going to a landlord iyswim?

Twinklemegan · 05/02/2008 22:38

Are you in England? What you need to do is visit some lenders and get an approval in principle for the amount you want to borrow. Then put in your offer and if it's accepted get a survey (a proper one mind, not just the mortgage valuation). Once you've got the survey results you can make your application and all being well you'll get a formal mortgage offer.

Things are getting much more difficult, but I know people who have had 100% mortgages approved recently so it is still possible. 3 and a half times your salary is a reasonable figure - it's the affordability aspect you'll really have to prove. ie can you guarantee to afford the monthly repayments.

Also bear in mind if you have any other credit then this will be taken into account in respect of how much you can borrow.

Original poster

itsahardknocklife · 05/02/2008 22:45

Thanks pussin - we are renting at the mo so it would be nice to not be throwing that cash away every month.
We are in England, Twinkle. We only have credit for a car and the mortgage would cost us about £150 more a month than the rent does now, but the council tax would be less.
I've had bad credit in the past, but I have dealt with all that.
DO you think we'd be best going to a broker? The estate agent has a mortgage guy - are they any good?

OP posts:

PussinJimmyChoos · 05/02/2008 22:50

We went to a broker based at the Estate agents and it was good in the sense that you do get to see a lot of rates in one sitting. In fact, we used the same broker for when we moved mortages too.

However, I would recommend you also shop around online as well - you may find something that you like and you can then either speak to a broker or go to the bank in question. Remember, the brokers do get a commission if you go with a lender they recommend, but they declare that anyway so its not underhand in any way at all imo

£150 more for your own property is good - when we first bought, we calculated that the rent we had paid out to our landlord previously, totalled around £24k....(we were renting for 4 years) so even though we were buying at the peak of the property boom, we still felt we would be better off than paying rent - and we got a bigger place to boot rather than just a poky flat, no garden etc!

Twinklemegan · 05/02/2008 22:50

Is it an estate agent with a building society/bank arm like the Halifax? We used them for our first mortgage and they were fine. Otherwise, rather than a broker (who is likely to charge) try to find an independent financial adviser. Many of them make their money from commission paid to them by the lender, so it won't cost you a penny and they have access to some more competitive deals than you could get by yourself. As you say you've had bad credit in the past, and IFA could be your best bet.

Re your car loan, they may well take the monthly amount you pay for that off your income before calculating how much you can borrow.

Twinklemegan · 05/02/2008 22:53

By the way, we're about to stretch ourselves like hell to get back on the property ladder (in terms of affordability rather than mortgage percentage). After moving to a different part of the country (Scotland) we're currently renting. I hate
a) throwing money down the drain each month, and
b) having no control over the house we live in, having to ask permission to put up a shelf, etc.

Original poster

itsahardknocklife · 05/02/2008 22:57

Yes I can't wait to be able to decorate!

I was thinking about the car loan. It is in DPs name. Would it be immoral to not tell them about it if the house was in my name with my wages?

OP posts:

Twinklemegan · 05/02/2008 23:03

If the mortgage will only be in your name then technically speaking it's only your credit they need to know about. BUT your DPs loan will come up on your credit search so it's best to mention it beforehand. It may not affect how much they will lend, but you'll need to mention it in your budget planner since presumably it's you making the repayments?

We're in a similar position btw. I'm the breadwinner, DH is a SAHD.

Are you sure you want the house to be only in your name? You can actually get a joint mortgage even though you're the sole earner (that's what we're doing). That means the house can be in both your names as well.

PussinJimmyChoos · 05/02/2008 23:04

It would be better to tell them about the loan as it counts towards the affordability overall and it is part of your budget, regardless of what name its in...

PussinJimmyChoos · 05/02/2008 23:04

whose name....

Original poster

itsahardknocklife · 05/02/2008 23:06

you're right, it was such dishonesty that got me in a pickle in the past!

OP posts:

Twinklemegan · 05/02/2008 23:11

Just remember that if you're that worried about getting approved that you feel you have to fiddle the budget, maybe deep down you feel you can't afford it? If so, best to admit it to yourself rather than go ahead and get into difficulties.

We had to do a lot of soul searching to find the right compromise between what we'd like to afford and what we actually could afford. You have to be honest with yourself first and foremost.

Original poster

itsahardknocklife · 05/02/2008 23:14

I'm just petrified of anything to do with money.

OP posts:

Twinklemegan · 05/02/2008 23:18

Get yourself an IFA - they'll be able to help you. It may even be an IFA through your estate agent. They'll look at all your figures and come up with the options that are right for you. Good luck!

PussinJimmyChoos · 05/02/2008 23:21

Just remember that for every agreement in principle you get, you will leave a 'footprint' on your credit history. The lenders don't like seeing too many footprints as it looks as if you are having difficulties getting a mortgage so asking around a lot - if you see what I mean? Get all the facts and figures straight, decide what rate you want and then get an agreement in principle to reduce the number of footprints.

Also, you can check your credit history first with Experian for a small fee - DH did this when we had a cock up with a furniture company and they incorrectly listed him as a bad payer or something so we kept checking the credit history until it went clear again

I would also recommend going for a fixed rate mortgage - although base rate may go down in the next year or so, I can't see it going down that much, given the economy and a fixed rate means you know how much you are paying out each month - no monthly panics when the Bank of England makes a base rate decision etc!

Original poster

itsahardknocklife · 05/02/2008 23:21

thanks for the help x x

OP posts:

LordCopper · 06/02/2008 10:02

Please, please don't use the estate agent's finance person. There are loads of IFAs out there who will give much better and more independent advice. Big brokerages such as London and Country don't charge for their service but get commission from building society/bank if you take out loan. Do not get involved in buying any payment protection/critical illness cover.

Original poster

itsahardknocklife · 06/02/2008 10:29

I shall look up London and COuntry, thank you.

Should we not bother with protection cover?

OP posts:

kaz33 · 06/02/2008 10:36

Also be wary of HLC ( higher lending charge) some lenders will charge you extra for this if you have a 100% mortgage. Basically it is insurance that you pay for (normally added onto mortgage) to protect the lender if you default on the mortgage and the lender loses money. Then if in the future you have some money the insurance company can come after you. Horrendous thing that hit a lot of people who lost there homes during the 80's crash.

But lots of lenders won't - so shop around.

Original poster

itsahardknocklife · 06/02/2008 11:33

We spoke to London and Country and they said that because of my bad credit history, we don't stand a chance of getting a mortgage without at least a 10% deposit. Ho hum - better go and get a lottery ticket...

OP posts:

lilyloo · 06/02/2008 12:59

it's a hard knock life my dp an advisor and may be able to help you can mail him here for free impartial advice also check out pc's post as she had also been turned down here

Original poster

itsahardknocklife · 06/02/2008 13:15

thanks - will have a chat with my other half and get in touch x x

OP posts:

Flip