So, Mrs RRR and I want to buy a house with a 10% deposit.

Having been grubby stoodents and also having faced redundancies in the past we’ve had purple patches in our financial history. However, now we’re both in stable (ish) jobs and earn a bit above the average we’d like to buy a house.

The thing is I’m quite terrified of applying for a mortgage and just being laughed out of the bank/building society.

I’d prefer not to receive the stock STW style response – ” if you’ve less than a magical credit history you don’t deserve a mortgage and in fact should sell your wife, bike and car before you think about such things”.

I would however, appreciate the views and opinions of anyone else who’s been in such a position! Which banks/building societies are perhaps more accommodating etc?

Thanks and hugs and regards

Go see an independent mortgage advisor. They will tell you everything you need to know.

Go to an independant financial advisor and let then be laughed at for applying for you.

They’ll have a better idea who will be accomodating for you.

Meh I’m self employed and my wife doesn’t earn a huge amount-we managed to get one last year-not a massive amount though granted.

I did think about the above but have no idea on cost?!

They are often free, they get paid by the bank for setting up the mortgage.

as long as your not majorly bad , can show you have learned by having a clean record for a few years and have a decent deposit i cant see why you will have an issue.

I had more issues getting mine with a squeeky clean and populated history vs my mate whos been bankrupt, had CCJs and whos deposit came direct from bank of mum and dad in the form of a loan.

same value house at the exact same time with the same completion date.

they used an IFA who sorted it out for them and all was grand.

As above, speak to an IFA.
BUT; first go on Experian. I was a bit dismayed to find that I had a less than brilliant credit score. Further investigation found;
1) Financial association with an ex girlfriend who had appalling credit.
2) Not on electoral role, due to;
3) Two ways of writing my address
4) Mortgage not on credit history (due to number 3)

The correction of the above has resulted in a very good credit score for me!
Do this before you apply for any credit. Applications are logged and it will look better without any refusals. It’s very cheap and quite quick. Review your details with a tooth comb.

As wrecker says… check you credit online via experian. you can sign upto a free 30 day trial.

“3) Two ways of writing my address”

this killed me ….. i was living in an old schoolhouse.

on the electoral roll/official docs it was called shoolhouse.

simple spelling issue but it caused me a huge headache as my information didnt correlate with that of the banks and experian etc

“Purple patch” means a period when things were very good, by the way. Just thought you’d like to know.

I work in the industry, do mortgages for people like you every single day, work for a major high street name.
Do you have any CCJs or Defaults?
If you’ve had no defaults or ccjs you will get a mortgage from most high street banks. Both employed with permanent contracts?
Some tips: Keep all your bank stats, FTB’s generally get asked for 3 months bank stats. If they show you constantly in your overdraft, get out of it and stay there for 3 months, then apply. If mum n dad are lending you money tell the bank it’s a gift and tell your parents that’s what you’ll be saying. If you have credit the bank will be able to see all of it so don’t lie when making the application, they’ll know.
Any other specific questions? shoot.

Jekkyl – how, if at all, are investments (shares/funds etc) taken into consideration when applying for a mortgage?

not at all, unless they used for a deposit then you need to evidence them. Even if you have savings that could be used to make the mortgage repayments (if out of work for eg) we don’t care and will be far more interested in your earnings.

We built 5 houses in summer 2011 spring 2012 as a fill in job and completed two of them, a couple who’d managed to save 25k and were first time buyers and both in secure good jobs couldn’t get a mortgage because the bank wanted them to raise at least 20% of the value as a deposit because they were new houses. I actually felt really sorry for them as saving 25k must be bloody hard work.

not at all, unless they used for a deposit then you need to evidence them. Even if you have savings that could be used to make the mortgage repayments (if out of work for eg) we don’t care and will be far more interested in your earnings.

Income from investments? Is that added to your earnings?

And how are bonuses treated?

Generally income from investments is not treated as income directly because it is not is guaranteed/can fluctuate. However if you can evidence several years of payments some lenders may take some it into account. If you have an annuity (the type of policy your pension buys) then they will take all of it into account as they are generally guaranteed.

With bonuses most lenders will take half of it into account, some none at all. If your bonus is very large i.e. more than your basic salary (currency/stock broker?) then they will likely use a mean average of your last 3 years bonuses.

How would I fair?

Not a brilliant credit history in UK (was bad with my credit card as a student but cleared it all), moved to ireland and bought a house 7/8 years ago.

Now looking to probably come back to the UK with 80K or so in my pocket, I occasionally dip into the overdraft with my current mortgage but we have been overpaying since we got the mortgage.

Wife would have a perm job and I’d be looking, but not sure of the market.

Would UK banks accept Irish bank statements etc?

10% is not very much deposit to go on.

20%-30% seems the norm these days.

@Saccades
Banks probably would accept irish banks stats but that won’t be your problem and you will struggle. Our place (I’d rather not say who, for obvious reasons) needs a UK address to run the credit search. If you’ve got no UK credit history you can’t have a mortgage. We need to see you’ve had credit and run it correctly and had no ccjs/defaults/ivas etc. If you’ve been keeping a bank account or active credit at a UK address (mum n dads?) then just claim that address is your residence but you’ll have to prove you live there with 3 months bank stats. You (or your wife) would also need to have started the job with perm contract before we would entertain an application.

In answer to the question we have no CCJ’s but a small default from 3 years ago which I’m still trying to get removed (the company involved agreed not to default us if we made and stuck to an arrangement , which we did).

We both have permanent contracts (me an IT nerd, Mrs RRR a teacher) but I’m in the slightly unusual position of having an extra approx 35% of my basic wage as overtime, on-call and bonus which I suspect can’t be used for application purposes?

Rbs wanted to include it on my application

I didnt want to as its largely dependant on business . If theres no work i get no bonus.

So just gave them low figures 😉

I’m in the same boat as you, but I suspect looking at property a fair bit cheaper. I find mortgages terrifying frankly and I kept getting waylaid by just browsing the Internet and just looking at numbers, it was all getting a bit silly. I then went on that Martin Lewis’ website and had a mooch around their FTB mortgage guide which was quite informative. I then gave the people who sponsored it a ring. They are called London & Country and are, apparently, the UK’s biggest fee-free mortgage broker, they take commission from the mortgage company and get you the best deal.

Really friendly and really helpful. I have an average credit rating and I can borrow quite a bit more than I expected.

Hi Matt. I did exactly the same as you this afternoon and got an online “in theory” quote.

I’m only intending to buy a modest house as we’re thinking of mini RRR’s at some point soon and need to be able to cover the mortgage on effectively once income (not easy when most first time buyer deals are around 5%!)

Did London & Country do a full search based on your circumstances or just a quick quote?

London & Country

when i spoke to them they did say that the best deals are only available direct for FTBer’s. Banks don’t run them through the brokers.

Currently trying to be very good and get a few months no overdraft, no bank charges etc etc before trying for a mortgage.

I’m only intending to buy a modest house as we’re thinking of mini RRR’s at some point soon and need to be able to cover the mortgage on effectively once income (not easy when most first time buyer deals are around 5%!)

Please keep in mind that 5% is petty much the long term average in terms of mortgage interest rates, so factor that into your own affordability calculations (rather than just taking what the bank says at race value).

If things change you could well end up paying more than that.

[hoping to avoid sounding *too* smug! Just wanted to add a bit of context!]

Yep it’s a fair point sockpoint. 5% seems to be the absolute minimum for a first time buyer with our LTV ratio.

I’m just annoyed by all my smug work mates who bought in 2007 and have tracker mortgages at about 1%!

RRR, how small is a small default? You might struggle with that default on there, most lenders like their ftbs to be squeaky clean, especially with only 10% deposit. Some lenders might be willing to consider you if you have a good reason? redundancy for eg or if the default is very small say £200. This is where a broker would be able to help you, suss out which lenders would consider you.

See my answer above about bonuses, some will take 50% some none. Good luck, buying a house is better in the long run because who wants to be paying rent when you retire?

Miss njee20 and I just got a 95% mortgage as first time buyers with Nationwide, all very painless. Set up their ‘Save to Buy’ account a year or so ago, then got the related mortgage. I’ve got a good chunk on cards, they wanted that cleared to a more reasonable sum by the day of completion, which is fine. Interest is reasonably high compared to most currently, but hey ho!

You do need to save for 6 months with them to apply for the mortgage.

Firstly before even looking at mortgagee you need to understand your credit rating.

Dont just get Experian, you need Equifax too, and there is also a 3rd one which name escapes me at the minute. Dont get conned in to spending a fortune, the statutory cheap report they do is fine, but they could all have different info on them.

Have you got credit cards / car loans etc at the minute? If not get one. Get on the electoral role too.

When you know you have a good rating then apply. The standard bull /ignorance from lenders is that they will say apply and you will probably get accepted. Dont do this, it could screw your chances of getting a mortgage elsewhere.

does having a few charges matter? got hit for a few over overdraft limit ones end of last year? all sorted now and hopefully finances are sorting themselves out now.

We got charged for going £5 overdrawn (no overdraft), Nationwide didn’t care. To be honest I was really surprised how little stuff they asked us and how uninterested in our history they were! Not in a bad way!