Mortgages - anyone with any personal experience would be great!

[mrsbedders]

Hi all

Just want to hear some of your experiences really, we currently rent and have been for the last 4 years and are now looking to move. Never even considered a mortgage because we don't have good credit and have no deposit. What I'm wondering is, is there anyone out there who has been given a mortgage even with poor credit and no deposit? I guess I'm clutching at straws really. I have had a mortgage before, but the relationship collapsed and I've never even given owning another house a thought since because I've always thought that it's completely out of the question.

Any input would be great, thank you xx

Alternatively I'm going to start playing the lottery.... xxx

 

[Holi]

My mums a mortgage adviser so I know a little! I know alot of places offer 95% mortgages, but no 100% ones. So realistically your going to probs need to save 5-10k to get a house around 100-200k.

Go on experian to check your credit score. I don't think you won't get a mortgage for bad credit, it's just that you will probably get a rubbish rate.

Most banks have online calculators that work out how much you could borrow so you have an idea of price range houses you could potentially go for - but realistically your gonna need some money behind you, not just for deposit but solicitor fees, stamp duty xx

 

[Lolly85x]

100% mortgages don't exist anymore. 95% ones do. But are really hard to get. There is some new builds that do schemes to help to buy.
Again mortgages with poor credit are hard to come by. Your seen as a risk and if you do get accepted the intrest rate is higher.
As of the 26th of April new mortgage rules apply, they check 3 months worth of payslips, bank statements, they check if your over drawn, what outgoing you have. Childcare, sky, what you spend your money on basically.
You also need your lawyers fees which can add up quite a bit.
You would usually need at least a 10% deposit then extra for fees.xx

 

[Rachel80]

In all honestly it is very unlikely that you'll get a mortgage. Mortgage providers are very picky & your credit needs to be nigh on perfect. The sub prime market is an option but they are also a lot stricter than they used to be, interest rates are sky high & it's tantamount to loaning from a loan shark if you ask me. It's a difficult world when applying for a mortgage & it's set to get tougher as lenders are for more evidence of outgoings. I would suggest you access your credit files & see if there is anything you can do to improve them, but if it's just a case of defaults, ccjs etc, you will need to wait for them to drop off completely & get a deposit together before considering buying - you'll need money for stamp duty & solicitors too x

 

[CamFi]

Just remember that having a mortgage can work out more expensive than renting. If you don't have much of a deposit, and can't afford to make more than minimum repayments, you'll be paying huge amounts of interest, such that you are effectively renting from the bank, and also responsible for paying the upkeep on the house. It really depends on how much house prices are compared to renting a similar house, and interest rates. Look at how high interest rates have gone in the last 30 years and make sure you'd be able to afford your repayments if interest rates went that high again in the future.
You need to look at the costs for your situation (or get someone to help you) and see if it would really work out cheaper in the long run. Also look at your budget and see if you can start saving a bit more, so you can eventually buy once your deposit is large enough that buying becomes cheaper than renting. For us we needed to build up about 30-40% before it became worth it, but as I said it really depends on your own situation.

 

[Pumpkin9]

Just remember that having a mortgage can work out more expensive than renting. If you don't have much of a deposit, and can't afford to make more than minimum repayments, you'll be paying huge amounts of interest, such that you are effectively renting from the bank, and also responsible for paying the upkeep on the house. It really depends on how much house prices are compared to renting a similar house, and interest rates. Look at how high interest rates have gone in the last 30 years and make sure you'd be able to afford your repayments if interest rates went that high again in the future.
You need to look at the costs for your situation (or get someone to help you) and see if it would really work out cheaper in the long run. Also look at your budget and see if you can start saving a bit more, so you can eventually buy once your deposit is large enough that buying becomes cheaper than renting. For us we needed to build up about 30-40% before it became worth it, but as I said it really depends on your own situation.

Surely buying is always cheaper than renting with a repayment mortgage as ultimately your investing some of your money and will get it back if you sold (provided you didn't go into negative equity) whereas renting is literally giving your money to someone else and never getting it back!

Like the others have said though. Get your credit history up through one of the credit score providers and work on improving your score. For example are you registered to vote? Are all your details correct? At the same time try to build up a deposit. You'll need 5% with help to buy for new builds at at least 10% on private sales plus money for surveys, fees etc and depending how much the house would be, stamp duty too

 

[CamFi]

Surely buying is always cheaper than renting with a repayment mortgage as ultimately your investing some of your money and will get it back if you sold (provided you didn't go into negative equity) whereas renting is literally giving your money to someone else and never getting it back!

Any interest you pay to the bank is just as lost as rent money is. It can work out cheaper in the long run to pay rent and invest your savings elsewhere (isas, high interest accounts etc) until you have a bigger deposit and so will ultimately pay less interest on the mortgage. It really does depend on the ratio of rent to house prices in your area.

 

[CharlotteH24]

My boyfriend is in the middle of buying a house, he has £5000 saved and his parents are matching him and going into 50% ownership with him. It's the only way that he can get a mortgage despite having a credit card and car finance which have never been late. His parents are essentially acting as a guarantor as they have bought and sold 3 houses now.
When my boyfriend went in to a mortgage adviser they said that credit cards and car finance's are small fry in the mortgage world and that renting for a year, showing that you can juggle bills without being late would be more likely to get him a look in to getting a mortgage by himself.
You won't be able to get one without a deposit of a few thousand, you're looking at a 90% or 95% mortgage. Where I am there are 3 bedroom new builds for sale for just £85,000. I think you'll just have to keep renting, keep building up your score, try to get saving and then find out what you can get.

 

[Lyllian]

What the others have said. You will need a deposit. We had £25k.deposit which was about what they were looking for on a £120k house, so not a pricey house at all
The checks are also stricter than three years ago (we're planning.on moving and increasing our mortgage). Also it's expensive in terms of solicitors fees, surveys which end up needing done etc so allow a good few thousand for that. On plus side my mortgage is a lot cheaper than what my rent was! X

 

[Mrs M]

There's always the option of shared ownership. Not 100% on details, but basically you buy part of a house, and pay rent on the rest! You can buy it in stages (called staircasing)until you eventually own it all. I work for a housing association, and I know they do it (just not my dept).Could be worth looking into - I'm guessing you would probs needs a much smaller deposit if your mortgage was only going to be £50000 for example?

 

[Sprout]

I would advise you to definitely go and talk to a mortgage adviser - they will know what your options are with your circumstances.

I was very fortunate in that my parents were able to give us the deposit for a 95% mortgage but I was worried that my boyfriend's non existent credit rating (never had a credit card or even a contract phone etc) would prevent us from getting a mortgage. Our mortgage adviser was able to find us a bank which didn't actually consider credit ratings too much, rather they looked at whether we'd be able to actually afford a mortgage from our existing incomings and outgoings.

Our mortgage advise was completely free and incredibly useful, I still can't believe we're in our own home and we really didn't have to put much effort into the process - it's definitely worth seeing what's available to you locally

 

[Lyllian]

Be careful with shared equity schemes, many of them require you buy out the other party outright five years later. Unless it's the government scheme but i think that ran out of money and was pulled x

 

[Jolly81]

I definitely recommend signing up to experian/equifax- I did it recently and while I believed I had fantastic credit score there were a few things on there that brought it down (like the number of credit searches done by one company for broadband/tv/phone- they did 3 searches!!!) so you can see exactly what it is about your credit score that isn't great and you can work to improve it

I know that doesn't necessarily help immediately but just wanted to share x

 

[Ella1979]

They've tightened everything up so much it's untrue. We just had a meeting with a financial advisor to try to remortgage our house mid-term (we're on 5yr fixed term), but due to the mortgage changes banks would only lend us a fraction of what we were lent 2.5 years ago. We both have good jobs, good credit ratings - none of it matters - they now take things like children and the cost of childcare into account and so we're totally screwed. We can just about afford our current mortgage and will now have to wait until the term ends and hope to goodness someone will let us remortgage. Total nightmare.

My advice would be to use something like Nationwide's affordability calculator - if you do the full version it'll give a good idea of how much the banks would be prepared to lend.