We’re after a £300k-£350k house down in SE.
Joint mortgage with wife, I’m on 32k +16%bonus and have additional income (self employed consultant) of around £8k. (Also company car, so lower expenses in calculation)
wife is a teacher on ca £28k. Both stable employment same place many years.
I have some defaults to total £10k (all being challenged at FOS, half should be upheld and adverse info removed, remaining half paid off).
all defaults are 18 months old now.
wife has 2 defaults totalling around £1.2k that will be satisfied imminently and one CCJ from Oct 2019 paid within 3 months (I wasn’t aware that if I paid it full within 28 days it would disappear- I would have done if I knew)
what are the chances of decent apr mortgage with LTV 95% if we were to look now? Would it be worth to wait 6 months until the cases are decided by FOS and defaults paid off?
Hi Michael, thanks for getting in contact.
Whilst a mortgage will likely be possible you may require a larger deposit unless you wanted to buy a new build.
It would come down to the finer details however with a CCJ in October 2019 a mortgage at 95% LTV is unlikely to be successful for some time.
Again the devil is in the detail however based on that credit issue alone a mortgage is likely to be possible now with a 15% deposit and in 19 months with 10%.
The two exceptions to this would be if you either purchased a new build using the Help to Buy equity scheme or bought a property through a Housing Association using Shared Ownership. Both of these options would allow you to put down a 5% deposit in the short term.
Having some of the defaults removed would be a positive step however if the CCJ remains it will be the main factor in determining what is possible.
Interesting! Did not consider new build due to the higher cost, although we have some being built near us costing around £500k...
I presume it might be slightly out of the reach on income ratio as would require around £375k mortgage (after deposit and equity loan)?
There's numerous factors involved in the maximum you can borrow (age, commitments, dependents etc) however as a general rule I wouldn't expect to borrow more than 4.5x your combined incomes.
I I dug a bit deeper into shared ownership too. Less properties available but options seem interesting as seem cheaper to repay quickly and are new or nearly new.
as for the deposit, if the share of the property is 50% and the value of the property is £400k, do we need to put down 5% deposit of the value of the house or the value of the share?
Hi Michael, the percentage would be based on the share price not full market value as follows:
Full market value = £400k
50% share = £200k
5% deposit = £10k