being in a postition to buy a house in 12 months time

thetimeisnow

Can someone give me a to do list so I will be in the best position to be approved a mortgage in 12 months time, I know Ill need a deposit and probably improve my credit rating a little

jim salter

thetimeisnow wrote: »

Can someone give me a to do list so I will be in the best position to be approved a mortgage in 12 months time, I know Ill need a deposit and probably improve my credit rating a little

ToDo:
1) save 10% deposit
2) apply for mortgage

thetimeisnow

would taking out a loan to buy a car and being able to show you proof of repayment history be a good idea?

Paul_Mc1988

jim salter wrote:

ToDo: 1) save 10% deposit 2) apply for mortgage

Have no existing loans or cars on finance

Paul_Mc1988

thetimeisnow wrote:

would taking out a loan to buy a car and being able to show you proof of repayment history be a good idea?

No any existing loans are a bad thing in the eyes of the bank

Johnnyhpipe

Clear credit cards
Clear all loans
No online gambling
Regular savings
Good clean bank accounts (I used to spend cash only so theres no trace of my lavish lifestyle where I actually got to eat out once every 2 months!)
Basically hide who you really are in your accounts!

Blueskys!

Paul_Mc1988 wrote: »

Have no existing loans or cars on finance

Had two cars on finance and got a mortgage no problem

1)have a stable job
2)perm job
3)save deposit
4)mortgage accepted

thetimeisnow

whats the tax incentive thing first time buyers benefit from, also are shift rates bonus and oncall payments considered when going for a mortgage

sullivk

thetimeisnow wrote:

would taking out a loan to buy a car and being able to show you proof of repayment history be a good idea?

Definitely not a good idea!
We got mortgage approval last year but only if we paid off our existing car loan (think is was about 14K). Best to be debt free going in with an application.

Your regular savings should show your ability to repay.

GingerLily

Credit ratings dont work the same way here as it does on the US and UK. If you want to show you can handle risk, get a Credit Card and pay it off monthly, don't get a loan!

thetimeisnow

Is the deposit definitely 10%, I heard for first time buyers its 20% and will I needa further 10k for floors painting and furniture?

dellas1979

thetimeisnow wrote: »

Is the deposit definitely 10%, I heard for first time buyers its 20% and will I needa further 10k for floors painting and furniture?

Not very clear from your posts. Are you intending to buy a home (and renovate a little)? or are you building?

Got approved for a mortgage earlier this year (for a build).
A lot of good points made above already. Here is what Ive learned.

You can apply for 3.5 times your salary. This is a general rule of thumb. Its something that can be extended, in some cases. If you are in a good position financially, and stable job, you may be entitled to more. The thing is, if you get into this position, do you want a bigger mortgage repayment for a bigger mortgage loan?

A bank will ask for a stress test prior to making an application (in my case, it was for 6 months. Some banks can ask for 12). This means, if you are looking for a mortage of say 200k, what ever the mortgage repayment is on that, you need to be able to show that you can save additional amount (so for example, e1200 mortgage + 300 stress test, so you must show you can save e1500 per month). Its to show the bank that you can afford to repay each month if there was a 1/2% rise in interest rates.

Always clear your credit card each month.

Dont go into over draft in your current account.

Again, a general rule of thumb is that you need a 10% deposit. This again will vary.

If you are applying as a single applicant, they can be a little harsher on you (and in my eyes, rightly so. You are a bigger risk to them). In that case, I wouldnt have any loans or anything on HP at the time of application.

You asked about 10K for furnishings etc. This is not the banks business (unless signing off/getting a mortgage for a new build). Also, you could spend 10k alone on a floor. The point am making is that its how long is a piece of string if asking how much something will cost to decorate. Ikea sell sinks for e100. Ive seen other's for e400. You know what I mean? The bank isnt going to loan you money to spend on decoration (as part of the mortgage).

If you are buying, the banks business will be to for you to get structural and engineer reports. Which you need to pay for. This is assure them that the house wont fall down.

Also, you will need to pay life assurance every month along with a mortgage payment, this is for when in case if you pass away during the term of the mortgage.

So, after all that, I think its best you actually pick up the phone and speak to a bank directly (or email them), and ask them what their requirements are. Its very simple (albeit, I know its daunting starting off!). You are only making enquiries so you can know what youve to do for the future.

There is also the help to buy scheme (if you are building or buying a new build). If you want a general overview of this, let me know (note, as said, its for if you are building or buying a new build. Not for if you are going to buy an already existing house).