Hi Alyson
Yep, currently and it's probably only going to get worse for the forseeable future, it's very difficult to arrange a mortgage. I think I read a statistic that 64% of mortgages now require a deposit of 40%, and thats to UK nationals as usually, foreign immigrants aren't usually included in widely publicised housing/mortgage figures. The 'general' thing currently is that a deposit of at least 25% is required to even qualify for any mortgage.
During the 'lending boom days' a 'responsible' first time borrower would put down a 10% deposit on a property, and finance/mortgage the rest. More 'riskier' borrowers put down 5%, and riskier of all were the one's who put nothing down and went for 100% mortgages. The frankly 'silly' ones are those who went for the silly 125% mortgages!
Foriegn nationals usually had to put down at the very least 20% deposit and mortgage the rest, however most mortgages for these wanted 30% down - at which stage all the credit checks and all the proving of income and all that usually were bypassed.
Needless to say, most of that had been stopped.
Looking at your figures, you say 60% of the house purchase price you'll be putting down as cash i.e your 'deposit' - leaving you needing about 145K in a mortgage. I'd say this does put you in a 'good' position to get the house you are looking at. Keep scouring the market, look at independant mortgage brokers who may have a mortgage for you to consider. There have been reports of a return to market of first time buyers, and of course these tend to be people like you, i.e those with consderable deposits to put down.
The downside if course as you've seen, that you are a 'currently' still a forigner. The credit reference agencies have recently changed some of the scoring criteria, and it's now harder to have a higher credit score, with your current relatively short time here, your credit rating won't' be of enough quality for lenders - everyones affected though, not just you personally - I've just seen my credit report and had a 45 minute talk with them and now have to re-arrange stuff to compensate - it went down, and this is after i piad back a large 8-10K debt i had, kept all my credit cards with no missed payments over the last year - it went 'down' instead of up! all due to this current economic climate! - the other element of course is with more and more job losses expected, lenders are going to see that if one of you lose your job, it'll 'most likely in their eyes' mean a default and they'll lose out (hopefully your a lawyer or high up in the medical profession!!)
The only other alternative is to look for a property that is cheaper and possibly means you need a much smaller mortgage - and I know that's almost jaw dropping becuase of the compromises involved!
Very very difficult to say - the property market seems to heading downwards, so now possibly isn't the best time to buy in your situation, maybe by waiting over the next 3-6 months will suit you and give you time to stash away more money!
That said, I've heard of crazy low offers being put forward - asking prices of £385K and a friends dad has put in an offer of £300K and it's being considered! maybe be cheeky and go in for a super low offer and see if the property owners of the place you're looking for will accept! it is a buyers market after all, so long as solid financing is in place.
Good luck! keep us posted?!
Cheers! Dennis! West London & Slough UK!
