Looking to buy my first home – would appreciate some advice
I’m hoping to buy my first home (a flat/apartment) in the next 3–5 months, ideally in the £210k–£250k price range.
By then I’ll have around £45,000 for a deposit, with £10,000 of that being a gifted deposit from my mum.
Income
Basic salary: £32,000
Unlimited overtime due to the industry I work in.
Total earnings:
Last tax year: £65,000
Year before: £55,000
Year before that: £48,000
I rarely take home less than £4,300 per month after deductions.
Annual bonus:
This year: £1,400
Previous years: around £1,000
Annual pay rises:
This year: 4.1%
Last year: 3%
Year before: 6%
Standby payments: minimum £189 every 5 weeks
Monthly Outgoings
Company share scheme: £400/month (already deducted before take-home pay)
Car finance: £422/month
Car insurance: £80/month (I’ll be paying this off in full before applying)
Gym: £26/month
Netflix: £19/month
Board to my mum: £240/month (this will stop when I move out)
I have no children or other financial dependants.
My concerns
I have an unsatisfied default of around £850 that will reach the 6-year mark in approximately 2 months. From what I’ve read, it should then drop off my credit reports completely. Is that correct, and would it make a significant difference if I waited until then before applying?
I’ve also stopped gambling completely for the last 4 months. It was never excessive (usually £30–£50 at weekends), but I’ve read lenders can look unfavourably on gambling transactions.
I do spend quite a bit on things like eating out, socialising and holidays. I always have money left over each month, but I’m wondering whether lenders are likely to see this as irresponsible spending, or whether they mainly focus on missed payments, debt and affordability.
I already have a Mortgage in Principle, but I understand that’s only an initial assessment and the full application involves much more detailed checks, including bank statements, spending habits, car finance and my previous default.
I’ve also heard that being declined for a mortgage can make future applications more difficult, so I’d like to give myself the best possible chance.
Based on my situation, would you apply now or wait until the default has dropped off my credit file? Any advice would be greatly appreciated.