Best way to start off on property ladder

Check your credit rating for defaults. If you have those, you'll struggle to get a mortgage until they clear off your file automatically after five or whatever years it is. It's not impossible to get one with defaults, but if you also have a low credit score too.. forget it.
 
Lifetime ISA. Get on Noddle, Clearscore, and MSE's Credit Club to check your credit history. It could be you have defaults that will be coming off in a year or two.

In the meantime you can save, and start improving your credit rating. BTW a poor credit history won't stop you getting a mortgage if you have a guarantor such as parents who own their own house.
 
paradigm said:
Concentrate on saving the deposit, maximising your HTB ISA, and repairing your credit history.
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Isn't the HTB ISA going to be fairly redundant once the LISA comes out? HTB-ISA has a max input of £200/month which is laughable.
 
Sui said:
The part I'm struggling with is - buy now or wait to see if house prices fall.:(
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I wouldn't count on prices falling. Things would need to get really bad for people to be desperate enough to sell at loss. This isn't 2007 when interests rates were so high. Most people's mortgage payments now should be less than comparable rent.
 
Glacius said:
Cheers for the quick advice, guess I will be getting my saving hat on now the new job has started and hopefully in that time try improve the credit rating as quick as I can and go from there, I am hoping the payment plans I had been on previously haven't added any defaults or anything lasting 6 years to my account... best get on to Experian and find out.

Does having a larger deposit effect the chances or actually getting a mortgage or does it effect the amount they will give you?
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I had a default from a mobile phone contract, 4 years old, had been paid off for 2 years. Credit score of 700 with Experian. Managed to get a mortgage at 2.54% with Halifax with a 15% deposit. I borrowed £85'000 and this was on a Salary of £30'000 at the time. Couldn't get a mortgage anywhere with less than 15% deposit because of the credit rating/default
 
englishpremier said:
Lifetime ISA. Get on Noddle, Clearscore, and MSE's Credit Club to check your credit history. It could be you have defaults that will be coming off in a year or two.

In the meantime you can save, and start improving your credit rating. BTW a poor credit history won't stop you getting a mortgage if you have a guarantor such as parents who own their own house.
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Guarantor made no difference when I got my mortgage last year, because of my credit rating and default i had to have 15% minimum deposit.
 
bayo000 said:
I wouldn't count on prices falling. Things would need to get really bad for people to be desperate enough to sell at loss. This isn't 2007 when interests rates were so high. Most people's mortgage payments now should be less than comparable rent.
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Very true -

My rent was £525
Mortage is £383 on a 25 year mortgage

(same property, 2 bedroom apartment, recent build, South Wales)
 
you need to improve your credit rating, how long that will take really depends on whats wrong with it, and save for a depsoit.
however you do not need these insane figures being thrown about. of 25k+
you need just 5% and its better to get on with that, especially with interest rates so low meaning your savings are effectively loosing money as house prices are rising far above inflation.
 
Glaucus said:
you need to improve your credit rating, how long that will take really depends on whats wrong with it, and save for a depsoit.
however you do not need these insane figures being thrown about. of 25k+
you need just 5% and its better to get on with that, especially with interest rates so low meaning your savings are effectively loosing money as house prices are rising far above inflation.
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Depends what's on the credit file, if it's a default, even one that's paid off and due to expire soon, you would most likely need 15% minimum. If the credit rating is nothing too serious and just late payments, 10% should be OK, get your credit rating to almost perfect and this will open up 5% deals.
 
I think you are a long way from buying a house, you have a 'poor credit rating' based on bills not being paid when you didn't have a job and have no savings.

You have to ask why would a mortgage company lend you £200k+ over the next 25 years? What if you go through a period of no job again - would you stop paying them back?

At the moment anybody looking at your case and doing a risk assessment would simply stamp it with 'Would not lend'. You need to work hard in building up a decent credit history, prove to these companies you can budget and be trusted with money (this includes having a decent level of savings / emergency funds if you do not have a job for a while) and build up a healthy deposit. Use all available savings accounts and government FTB schemes but be prepared for the long slog.

People say "My rent was £900 and a mortgage would be £600, I can afford it!" but you have to remember the £600 mortgage payment is a 25 year commitment, the £900 rental agreement is probably only for a maximum of 12 months.
 
Sui said:
The part I'm struggling with is - buy now or wait to see if house prices fall.

:(
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if house prices fall, that's because mortgages are very hard to get and very expensive. So unless you have a huge deposit, house price falls do not help most people.
 
VTR said:
Very true -

My rent was £525
Mortage is £383 on a 25 year mortgage

(same property, 2 bedroom apartment, recent build, South Wales)
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For pretty much everything around here Norwich. It's cheaper for me to rent than to buy. About £550 rent verses £650 mortgage for a 1 bed fat with £30,000 deposit.
 
Start Low, Work Up, Get your hands dirty. Get a credit card for daily spends to increase your credit rating (PAY IT OFF FULLY EVERY MONTH!)

Start off with a property of ~100k or less if you can manage it. As good a location as possible, but try not to worry about condition if you're even vaguely good at DIY. 10% Deposit + fees means you'll only need <11.5k. Living in in-perfect conditions should help motivate you to complete.

Even with a sub-prime 4-5% mortgage, you should be paying only £5-600/month for a 30yr repayment mortgage.

If you're doing up a house or manage to get a cheeky offer in below market value, consider starting off with a fee free tracker mortgage for a few months rather than fixing for long term. Remember your first mortgage will be based on the BUY value rather than MARKET value. Then after the dust settles, switch your mortgage for the proper market value which will likely reduce your interest rate. When i did this, my house value jumped £30k so i suddenly had another 12% equity!
 
I'd be careful with part rent part but, especially at the cheaper end. The property itself might be cheaper but the cost of maintaining a building etc.. could be similar. Ergo your 50% ownership place might come with a fat annual fee that leaves you not much better off than renting.

Having said that, shop around, some developers offer part of the deposit (because really new build prices are marked up a bit anyway - though banks accept it for mortgage purposes). If you're really keen to buy then perhaps you can get a place with low/no deposit and have it be cheaper than renting - you'd be stuck there for a bit initially until you build up some equity though.

Re: the credit rating - check with the usual agencies. You could also try running ur situation past a mortgage broker - frankly this is where they become useful. For someone with a normal job, rating + deposit then HSBC/first direct would often have been better than most broker recommendations. For someone with some difficulties like self employment or credit then a broker could be very useful for advice.
 
first things first you need to do one of these

http://www.nationwide.co.uk/product...calculators/mortgage-affordability-calculator

this won't do anything to your credit history it's a calculator which you fill out as much as possible truthfully as possible. you can make up things like expected purchase price and borrowing amount but play the figures safe.

if for instance you reckon you will pay £100K state £110K so the borrowing amount is higher just in case house prices rise (which they will do). Play down your deposit slightly too. If you reckon you will have £10K then put down £7.5K just to be safe so that you know if you get hit with an unexpected repair bill you have £2.5K to play around with.

that calculator will tell you based on your current situation how much they are willing to offer you. so if they come back and say £70K you now know you can look for a property worth £70K plus whatever deposit amount you have at the very maximum don't look at anything higher. lower would be of course a lot better.

for instance my lender was willing to lend me at least £30K more than what i went for in the end.

Sui said:
The part I'm struggling with is - buy now or wait to see if house prices fall.

:(
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why would house prices fall?


CaptainComedy said:
What is keeping your credit rating low? is it defaults?

A default takes 6 years to clear - use this time to save a deposit.

if you have 800 spare a month:

500 x 12 = 6,000 a year to your deposit

I got a £250,000 mortgage with £25,000 - you can get this in 4 years from nothing.
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he won't be lent £225K on £30K a year it will be around half that at best, even less if his rating is really bad
 
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