The Question
I’m trying to buy a shared ownership property. It’s my first ever home and I’m buying alone. Unfortunately, I’ve just been rejected by a lender because I have debt on my credit card.
Currently the debt is around £2,000 but I’m only paying the minimum. Should I find another lender or should wait until I’ve paid off the debt. I have £8k deposit to put down so could use this to pay off the debt but is it more valuable as a deposit? I’m a bit confused.
Scott’s Answer
Firstly, I would start by getting a copy of your credit report. Having access to this and understanding what a lender can see is very important, plus you can make sure there is nothing on there that you weren’t aware of.
Knowing what a lender is looking for before you apply will place you one step ahead and means there is less chance of you being refused again.
Having debt alone on your credit card will not necessarily mean you will be declined, it may however affect what you can borrow according to a lender’s affordability calculation.
With regards to paying off the debt, this very much depends on your personal circumstances and the lender you are applying with.
Every lender has different calculations and credit score requirements, therefore it is difficult to confirm either way without understanding your exact circumstances.
I would recommend speaking to a whole of market broker, they will be able to conduct a full review for you and understand your situation in full. They will then be able to review the whole market and advise you what to do best in your situation.
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Meet our experts Scott Barron and Jack Tutton
Scott and Jack are co-founders of SJ Mortgages. With over 15 years industry experience and after working for large corporations, they decided to set up SJ Mortgages with the aim to provide their clients with expert advice alongside a bespoke service.
Being a totally independent whole-of-market brokerage enables them to be completely customer focused and deliver a great client outcome. Being whole of market means that they work with over 120 mortgage lenders and have access to over 10,000 products.
A mortgage is many people’s biggest financial commitment; in the current difficult mortgage market Scott and Jack are here to help you navigate the process and get you the best possible result.
Please click this link to their website to find more information, access to a calculator, blogs and to get in touch with SJ Mortgages.
Q&A with Scott and Jack: “It’s never been more important to get mortgage advice”
Q: Hi Scott and Jack, it’s great having you on board as our new experts at What Mortgage. How long have you been mortgage brokers?
A: We have a combined 15 years’ mortgage advice experience and over 20 years in the financial industry.
Q: What is your specialist area?
A: We are a whole-of-market independent brokers, so we deal with everything from first-time buyers to portfolio landlords. One of the areas with which we have great success is self-employed clients and helping them navigate lenders’ criteria as it’s not a one-size-fits-all sector.
Q: Why do you think it’s so important for people to get mortgage advice?
A: It has never been as important, with the cost-of-living crisis, inflation and interest rates, it’s vital that clients understand what is available for them and not just what one bank will offer.
Q: What’s the best thing about being a mortgage broker?
A: There are many things we both enjoy, helping clients when they have been told no, assisting first time buyers get on the property ladder and of course saving people money.
Q: What do you do when you are not helping people with their mortgages?
Outside of work, Jack is a keen football fan with Portsmouth being his favourite team. He also enjoys playing football for his local club and running, he completed the London Marathon in 2021.
Away from SJ Mortgages, Scott is also a keen football fan, supporting Southampton. He tries to watch them at least a couple times a year. He also enjoys spending time with his family.
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