Mortgage Clinic: How long in a new job before I can get a mortgage?

 

'I'm returning to Wales after spending some years abroad in Chile. Obviously, I'll need to get a job before I can secure a mortgage, but must I work for six months to prove that I can support repayments? Or could I get the money straight away? I have a deposit of £15,000 and I'm hoping to find a home for about £90,000'
JB, Santiago, via email

You don't say how long you've been away, but the credit crunch and the recent cooling of house-price growth mean that the UK property market is likely to be a chillier (excuse the pun) place than when you left.

In fact, if you've not been home for the best part of a decade, you may not even recognise the place: in most parts of the country, including Wales, a remarkable housing boom has catapulted prices into the stratosphere.

However, after a 10-year growth spurt that generally saw prices more than double, serious signs of a slowdown are now emerging, with banks and building societies beginning to tighten their lending criteria amid fears of taking on too much risk.

This leaves you in a potentially tricky position.

To first answer your immediate query: it will definitely help your mortgage application if you've worked for six months, but that may not be necessary, says Rob Clifford at broker Mortgageforce: "Much will depend on what you've been up to in Santiago; if you've worked for months or years in a steady job – and start work soon after your move back to Wales – then many lenders will look favourably on this continuity and won't insist on six months' probation work."

Circumstances will be rather different, though, if you've been overseas for some time either travelling or studying, he adds, as lenders won't rate such behaviour in your favour.

David Hollingworth of broker London & Country agrees and warns that your spell in Santiago will likely have dented your credit score too: "Depending on your length of stay, a lack of credit history in the UK will count against you, and if you haven't been on the electoral roll during this time either, that could add to difficulties." On the brighter side, he adds, house prices "aren't racing away from you – and may well have dropped by September".

Your £90,000 price tag – and planned 83 per cent loan-to-value ratio – is rather optimistic. According to the Land Registry, the average house price in Wales is £140,289 – some £40,000 less than the average for England and Wales – but more than 50 per cent above your target price.

Of course, not every part of Wales is pricey: the average is £228,299 in Monmouthshire but £100,862 in Blaenau Gwent.

Using your £15,000 as a 10 per cent deposit instead of 17 per cent should allow you – salary permitting – to find an affordable home. And your luck may also be in. Recent falls in house prices have been most accentuated in Wales. In January, they slipped by 0.3 per cent; come September, they may be even lower.

Send us your questions and you could receive £50 to spend at Amazon

Foxed by jargon? Confused by all the options? E-mail a question to mortgageclinic@independent.co.uk. We will not reveal your identity, and we cannot give specific advice. If your question is printed, you'll receive a £50 voucher from Amazon.co.uk, so you can kit out your home with anything from a lawnmower to an espresso machine. www.amazon.co.uk/homeandgarden

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