How to get a mortgage?

[pepperrabit]

Hi,

No one in my family or my friends have a mortgage.

There's a property I've been eyeing up for a while as it would be an ideal "starter". If it's still available (been on for nearly a year) I would have the 10% deposit no problem.

But how do I go about it? I don't have any debt other than council tax, I have a steady income and a full time contract. I have only just started at my new job, my previous job I was at for 5 years.

I don't have credit out other than a loqbox save account as that's supposed to boost your credit score and my credit score is 656/999.

Aware the property I'm looking at could go but made me realise I should really be thinking about this.

Any advice, etc?

Thanks!

Fab thank you! A lot for London and county!

That's fab, so I can go see one as basically a "what do I have to do?"

I'd be questioning this too.

But first step- speak to a broker, they will help you work out how much you can afford to borrow and then that would tell you if the house you are looking at is within your reach.

I don't think you will struggle. Sounds like you have a good budget and you have learnt a lot about managing your money yourself over the last few years. Mortgage companies usually want to see the last 3 months payslips so that isn't long to wait. I would pay off the council tax debt. I have had mortgages without needing a credit card. (It's just something extra to budget for and balance and I would rather save up to pay for things. ) Are you registered to vote and on the electoral role? That affects your credit score apparently. Plus we should all vote. We found HSBC were offering good rates and no set up fees but this may have all changed now. If you look on Martin Lewis MSE you can mess around with changing the length of the mortgage and making over payments which can really reduce the amount you have to pay back over time. Get a structural survey done of the house before you buy. This should highlight any issues and you can then decide if you want to buy the house or try and negotiate on price. E.g. when we bought our house the structural survey picked up damp so we negotiated £5k off the price to cover putting in a damp proof course and replastering. We still felt the house was good value and a good price so we went ahead with the purchase. Sounds like you are making good financial decisions now. Good luck with the process.

The score seems really low, have you checked over your file to see what's impacting it? Do you have electoral roll history, payday loans even if it not current, any gone away notices, fraud flags or just very little history?

You should approach an independent mortgage broker for advice, they can guide you to the most suitable offers based on your personal circumstances.

How long will it take you to clear the council tax debt? It might be better to apply once this is cleared and your credit score improved.

Meanwhile, as I said before, research your local area thoroughly. As regards the house that has been on the market for a year, unless they are prepared to negotiate a realistic price, it isn't the one for you. You don't want to overpay, especially as a FTB.
Congratulations on your promotion. Save as much as you can for now!

I know a lot are recommending London and Country but I found them to be awful tbh

Thank you!

Yes, definitely. I'm super proud of how far I've come. As I was an unemployed single mother and there was no child care in my area so when I started working I could only do school hours and now I'm managing a business all within the last few years. I remember posting on a fb group asking for people in my old situation of they "made it" without qualifications etc. Money wise, if I had it I spent it and if I didn't have it, I borrowed it. Now quite like yourself. I just save up or I use the PayPal pay in 3 option.

Currently, my savings aren't the best but that's generally due to upgrading my home appliances etc as I've had mostly everything about 10 years and generally just enjoying not being on the breadline anymore. But I'm starting to put different pots away, such as my loqbox, the help to save scheme and just general. And yes, always been on the electoral role.

I think my poor credit is just from paying off my debts and I haven't applied for any credit in about 8 years as I'm a bit nervous incase I don't get approved and that effects my credit score, that's why I've got loqbox as that's supposed to boost your score and I think it will be paid off in the next few months so I think after that I will start looking at a credit card.

Thank you! And I paid off about 7k of debt from years ago, catalogues etc, in monthly instalments. And then haven't taken out in further credit in years just due to the fear of being knocked back for it. So I definitely need to do some sensible credit building. I have a loqbox account as that's supposed to help. On the electoral role etc

Thank you! And I'm not sure how much it is tbh but I have to renew my direct debit on Monday so will check then!

Thank you, I'd already considered something could be wrong but it did make me think more seriously as houses in my area go quite quickly and the price is quite low!

Thank you, that is definitely the plan going forward!

Having credit but not using it does wonders for your score. If you can obtain good credit limits (which won't be instantly given hut you could work up to them) but keep the balances low it helps.

The score itself won't be what the decision is made on btw, but the same stuff that improves the score improves the overall credit profile too.

If you can wait, try to build up your credit file first. A good broker should be able to find you a mortgage now, but if you can improve your overall credit picture first you should be able to access better rates. On a mortgage even a slight improvement in the rate you can get can save you large sums of money. Using the extra time to save up even more for a deposit will help the rate too by giving you a better LTV.

Money Saving Expert is great. Martin Lewis is a wise man. We always look at what he says about things.

Wanted to post an update on this!!

When I first wrote this post I thought I had council tax debt but about a week later I called to find out what the balance was and they owed me money!!

I then applied for a credit card with a £200 limit and I use it once or twice a month (mostly because I forget I have it) for around £20-£50 and then pay it off that week. My credit score currently is now 785/999 which I'm really proud of!

I have a mortgage in principle with a max borrowing of 150k so now just waiting on the right property to arise. My current deposit is 10k but will be able to add to that.

Well done OP, you're doing great! It's not easy when you don't know how mortgages etc work, so well done!

Well done!

Thank you! Like to post an outcome to things like these as when you're looking at different threads anywhere you get the question but you don't find out if the person achieved what they aimed for. So atleast if someone else searches we have a question, advice and outcome!

I'd probably wait a little longer and pay off the council tax debt first, that should improve your credit score, so give you better options. It will also mean you will have been at your current job for a bit longer before applying.

If you already have the deposit and aren't using it to repay the debt, you should open a LISA. You can pay in up to £4k each tax year and you get an extra 25% of what you've paid in. If you transfer over the full amount for this year now and then again in April you'll have paid in £8k and get an extra £2k in just a few months.

Hi, this thread came up because I posted an update to say it had been paid off etc. but thank you for the advice!