Well recently me and my partner have decided to get a mortgage on a new build property. We have reserved the house and are currently waiting for the mortgage to go through. The problem lies with me though, when i was 16-20 i got into some small debt not totalling more than £2000 but i havnt settled those debts yet and im now 24, obviously i am now in the process of getting these sorted. My partner has had loans credit cards etc and never missed a payment its all perfect credit history.

I earn currently 22.5k and my partner earns 13.5k i was wondering under the circumstances what is chances of us getting a mortgage for 130k with my previous history? we are putting 5% down ourselves, what is the possibility of us getting a mortgage under these cirumstances?

Thanks for your help in advance.

Hi there,

From the above information I would be quite suprised if you weren't able to get a mortgage. You will find however that the interest rates you will be offered may be slightly high due to the few lenders offering 95% mortgages. You will also need to be carefull with new build properties as lenders are increasingly worried about lending on new build properties due to them being over valued. Are you being offered any incentives by the builder? Is the house price in keeping with the house prices in the local area? I would advise before you put down any deposit then see if you can find a 1-3yr old property similar to the one you want to buy and see how much it's being sold for.

Looking at the lenders who are available you are going to be looking at about 7% for a 95% mortgage without paying silly fees which equates to Interest only payments of £760 a month or Repayments over 30 years of £875. These are only aprox figures but should help you see if the mortgage would be affordable.

Are you using the new build companys broker or your own?

How bad is your previous credit? If you have had any CCJs or defaults but they are over 3 years ago there should still be a lender out there for you.

Hope this helps, any questions hit 'Reply' and let me know!

Dan

Hi Dan thanks for your reply.

the builders are offering an 80/20 scheme, where they pay 20% for 10 years as we are first time buyers.

I checked out other house prices of the same build and they are all in the same price range if not more than the one we are wanting to buy. We decided to use the broker that the builders offered to us in hope that they might be able to work that much harder to get us a mortgage because obviously they will want the sale.

My previous credit is not the best but its all small debt from when i was 18 so it is over 3 years ago. Im hoping it is all going to go through nicely so we can start purchasing some furniture etc for the house before its completion date.

From what i have told you do you see any major problems we may encounter with the mortgage?

There are only a few lenders that offer the sort of mortgage you are looking for. This limits the chances you will get but if the broker has already obtained an agreement in principle with the lender you should be ok as long as they don't find something which wasn't declared (ie a default which you didn't tell them about).

Don't purchase anything for the house untill you have the formal mortgage offer! Lenders are changing criteria and products so quickly that your mortgage could fall down for no fault of yours!

Good luck with it though, I'm sure all will be fine.

Dan