Shopping for a mortgage

Hi there.

We're looking for a house (in or around Cambridge) and need to find someone to lend us the money.  We've found a couple good websites, http://www.buyingyourfirsthome.co.uk [nofollow] (from Halifax) and http://www.fsa.gov.uk/consumer/07_MORTGAGES/index.html [nofollow] from FSA.  This is good general information, but we'd appreciate any word-of-mouth advice people have about getting a mortgage too.  What are pitfalls we should watch out for?  Anyone have a list of trustworthy lenders?

It's a little daunting to sort all of this out from abroad.  We'd like to get a "mortgage agreement-in-principle" before we go on our 1 week house hunting trip.

Thanks!

Hi Miles Dirac,

Firstly, mortgages are based on very individual circumstances and it's not easy to give a focussed response over a web forum, however, there are some aspects which are common in 'most' mortgage applications

The '3 or 3.5' times your salary the providers will lend you is the 'usual' norm - I'd say beware of the places offering 5 or 6 (sometimes more) times your salary as it encourages over lending that could be beyond your means should your circumstances change.

I'm assuming you're American and here for a job. It may be difficult for you to obtain a 'normal' mortgage this way as you have no credit history here. Other's who are in this situation may be able to advise you on other ways of getting a mortage - however one way that I do know of is to put down a substantial deposit (usually 20-25% or more) of the value of the house/property. The lenders are then a little more 'willing' to accomodate you. I guess the higher of a deposit you put down the easier you'll find getting a 'normal' mortgage.

Other ways could be speaking directly to a mortgage broker to see what kind of mortgages are available for 'special circumstances' - you never know, plenty of mortgages have/can be arranged this way.

Another way is if you 'know' someone in the industry/trade - obviously less well known, but nontheless 'available' - Last person I knew retired about 2 years ago, and our current contact only deals in commercial property.

Overall advice, shop around ad talk to as many lenders as possible, dont get discouraged. Definitley stay within your means/level of income and expenditure. Choose an area which allows you to have quite a number of properties within your price range and don't be tempted to increase your lending just to get a place you know is out of your price range.

Property costs in the UK is a real sore point when it comes to finances and day to day living, ask others on this forum what places are like where they are. Pricing levels do vary tremendously in other areas of the UK although the main city/urban areas are getting up to the ridiculous levels like we get in the south east.

Good luck!

Dennis! West London UK!!

i'm over here on a work permit and purchased a home in oct 05.  my suggestion with mortgages- go through a broker.  make sure they have access to all of the market.  ask them how they make money (does one bank give them more commission). 

i found that the only way i was able to get a mortgage was to have a low loan/value ratio.  for me this meant a 23% downpayment.  also, i needed at least 2 years on my work permit.

good luck!

We were confronted with the same issue when we arrived here. All our credit history was in the U.S.

I spoke directly with the underwriters, providing them with the previous years income tax papers and current pay stub/employment contract to verify income, plus the name and phone number of an HR person at his company.

We put closer to 50% down, but we were cutting corners by buying a live aboard barge versus a house, The marine underwriters were much less accustomed to this kind of applicant. Have a hunch it will be easier with a convential mortgage.

There are narrow boats on the river at Cambridge. Maybe you should consider living aboard yourself. They are 70 feet long, 8 feet wide, and cost from about £50,000. Think of the vacations you would emjoy cruising along the lazy canals.

Thanks very much for the tips.  I'll post again to share how it goes.

We used a mortgage broker and got a loan withing a few months of moving here (no UK credit history). It helped that DH is British and I have ILR, but I know our broker was able to assist an American couple over here on HSMP when they had been here about a year. We were able to get a 100% loan as well. It is definitely possible and our broker was the key for making the process as easy as possible for us.  Good Luck!

We also contacted a Mortgage Broker...he found us a very good deal and we were satisfied. Then when we made an offer on a house the Estate Agents finance person asked for our details and sent us two quotes from other lenders....and one was actually better than what the first guy quoted us. Point - try to contact a couple of brokers and see what they come up with so you have a good comparison.

Best of luck!

Here is another great resource.

www.moneysupermarket.com