What do you think my chances are of getting mortgage approval?

misshoney

I am a primary school teacher, permanent 6 years on a salary of about 40k. My boyfriend is an electrician. He was working in England for the last two years and returned home at Christmas. He is working as a maintenance electrician for the last 4 months. He takes home about 500 per week. His job would be fairly stable but isn't called permanent as such a thing barely exists anymore. Between us we have no debts and 65k in savings.

However I have a record of being overdrawn since 2010, a problem I could have fixed ages ago that I stupidly thought wouldn't affect my credit rating. I was steadily saving and living on my wages, just in the red. Anyway, I have just topped up my account so that I am not in arrears. We have seen a house that we love and want to put an offer on it. I am afraid my bad credit rating will affect our chances. I know I could give myself 6 months to show a better credit rating but Im afraid the house will be gone. Also, I haven't been living on credit really because Im still only using the same amount of money. Do you think with a permanent job, good savings and now with no arrears, we might still stand a chance?

chris85

misshoney wrote: »

I am a primary school teacher, permanent 6 years on a salary of about 40k. My boyfriend is an electrician. He was working in England for the last two years and returned home at Christmas. He is working as a maintenance electrician for the last 4 months. He takes home about 500 per week. His job would be fairly stable but isn't called permanent as such a thing barely exists anymore. Between us we have no debts and 65k in savings.

However I have a record of being overdrawn since 2010, a problem I could have fixed ages ago that I stupidly thought wouldn't affect my credit rating. I was steadily saving and living on my wages, just in the red. Anyway, I have just topped up my account so that I am not in arrears. We have seen a house that we love and want to put an offer on it. I am afraid my bad credit rating will affect our chances. I know I could give myself 6 months to show a better credit rating but Im afraid the house will be gone. Also, I haven't been living on credit really because Im still only using the same amount of money. Do you think with a permanent job, good savings and now with no arrears, we might still stand a chance?

Yeah but realistically forget about your other half being on the mortgage since his job doesnt sound permanent and only in it a short time.

IN terms of the amount you can get from the bank the max would be about €160k, 4 times salary, as a rule of thumb. You would need minimum 8% of the house price which is no problem to you. Few extra grand for solicitors and all that.

Your credit rating would not be affected by the overdraft so other banks would not be privy to this info. Other banks will ask for at least 6 months statement so if ok for the last 6 months its all good. Your own bank may look at it unfavourably but do not worry about it too much as you can show good record of savings.

I would say you are in a strong enough position to get a mortgage but ultimately its up to the bank so get out there and find out. Brokers can be useful I hear.

misshoney

Thanks Chris85. Problem is I have only just cleared the overdraft and I haven't given myself the six months. If I have to I will do this obviously but I am afraid of losing our dream house as its very near work in a rural area that houses don't usually come up in. You are right though, its the banks I should be asking!

chris85

misshoney wrote: »

Thanks Chris85. Problem is I have only just cleared the overdraft and I haven't given myself the six months. If I have to I will do this obviously but I am afraid of losing our dream house as its very near work in a rural area that houses don't usually come up in. You are right though, its the banks I should be asking!

I would apply, try to emphasise the savings you have been making. You have good savings there. However banks are more prudent these days for obvious reasons so they may cling to the overdraft there as a reason to refuse.

Trish56

I think you need to provide more information misshoney. You mention arrears and overdrawn in your post. If you have been in arrears on a shorterm loan, credit card or credit union loan you will indeed have problems in getting a mortgage. If you have been using an authorised overdraft that is a totally different situation.

You need to clarify if you ever went into arrears on any loans or if constantly using an authorised overdraft. Have you had any unpaid direct debits? How much are you saving on a monthly basis and can you show regular monthly savings for the last 6 months. What is purchase price of property you are interested in. Are you under 30? Only with the above information can one give an indication on how much of a mortgage you would qualify for.
Hope the above helps.
Trish56

misshoney

Thanks for your replies. In answer to your questions Trish56 the situation is that I have been constantly using an authorised overdraft for the last 3 years so for that reason I am worried about my credit rating. I have no car loans etc but I do have a credit card and it has a limit of 2500. It is currently cleared and will stay that way permanently from now on but I had to pay it back monthly until now. I have no unpaid direct debits. Between us we have been saving 1200 per month but because of clearing the overdraft and credit card I have had to take most of my savings out at the other side to get myself back in the black. Although I suppose it still shows I can save and for all the bank kn ow I could have taken it out to buy a car or whatever. I should also mention, although I'm not sure if its relevant, that the majority of our savings have been saved my my boyfriend over the last few years and although he is in his current job only a short while, he has been in constant employment since finishing his trade. We can both show direct debits as proof of fortnightly savings for the past few years. I know what's bad is fairly bad but I also think we have a few things in our favour, my permanent job and his savings. We are both turning 30 in July. The purchase price of the property is 250, we are hoping to get it for 235. We are first time buyers.

chris85

Overdrafts do not show on the ICB.

Trish56

As your boyfriend is not in permanent employment and is only in his present employment for 4 months his income will not be taken into consideration and therefore if you apply in joint names you would only qualify for a small mortgage.
It is best if you apply for the mortgage in your own name only. You did not mention how much savings you have and how much you save monthly.

On a purchase price of 235k and on a salary of 40k you would qualify for approx. 165k so you would need a deposit of 70k which can be made up of both savings and gift. You need to show savings/rent over a 6 month period of approx. €1000 per month.

All lenders are very strict on the above criteria.

Trish56