We were reminded this week of how problematic these cases can be with a very 'normal' case we've been working on; a young couple who had set their sights on buying a Shared Ownership property of which they intended to buy a 35% share and had a deposit equivalent to 5%. On the face of it their income was good and even though one of the clients was still on maternity leave she was due to return to work in just over a month, so the lenders were happy to use her return to work income. The Affordability Calculators initially suggested they had lots of wiggle-room on the amount they needed to proceed, so initially things were looking good for them. Unfortunately when they supplied us with all of their documentary requirements (including their latest credit report) we discovered the total amount of their credit commitments was more than their combined annual income, which suddenly created a bit of a problem. Like many young buyers they needed transport to work and had got themselves a car each on finance. Being in rented accommodation their disposable income was theirs to do with as they wanted and their spending patterns had reflected that- why shouldn't they enjoy their income and build up a bit of credit card debt in preparation of their first born?

Applying for a mortgage is one of those events where our financial background is scrutinised in detail, and although the recognised Credit Profile reports produce a 'score', it's based on the most recent, rolling 12 month period which can be quite misleading, as the lenders will typically look much further back than that and take much more detail into account. Having some historic credit can help an application- oddly the situation is often worse if a client has no credit history or footprint to show a track record of being able to maintain regular payments on a credit agreement- but usually where the credit amount is small, kept well within the credit limits and ideally cleared within the set timeframe (or ideally earlier in the case of credit card debt).So if you know that in the next year or two you might be planning on buying your own property try to 'prep' as best you can to put yourselves in the most favourable light. If you need to get a car to get to work and have to rely on finance to get it, perhaps consider not going for the most expensive one you can afford at the time, or at least try to make sure you're not locked into a finance deal that refuses to let you out or amend without huge personal cost to you. If you have HP, credit card debts or similar then do your best to overpay these and reduce the outstanding balance as much as possible before you commit to your house search. It might lead to some restrictions on your social life but those are likely to be for a reasonably short time in comparison to the many years you'll be enjoying your own property (and paying for it!) Above all else make sure you make any credit payments on time as late or missed payments will affect your profile significantly and AVOID pay day loans; most lenders will run a mile when they see a PDL entry on your credit report or bank statements!

The H2B websites are useful too- use those or the internet to look for the H2B calculators- they generally work for both H2B and Shared Ownership in the same or similar way. You can complete your income and outgoings, the likely rental amount on the equity loan or share and confirm in advance whether your potential plan is looking feasible. This might help to identify which areas of your spending you need to change, curb or limit before they start to work against you. In most cases, even if you've agreed a purchase price on a property via an agent or a site representative and have a Mortgage Certificate from an Adviser confirming you're good to go, you will still need to pass a comprehensive Affordability check through the Housing Association. This check is usually much more detailed than the 'standard' checks done by lenders but by using the H2B calculators you should get a more accurate idea of how the Housing Association will view your application.

Our final tip is to try your best to get as large a deposit as you can. It's an obvious statement and one that's very easy for companies like us to churn out, but it can make a massive difference to whether your case is agreed or not. In the case of our young couple mentioned earlier, we couldn't find a home for them with their 5% deposit anywhere, but they were fortunate enough to be able to ask the family for a 'gift' of a further 5% of their share and that was the one detail that tipped the scales back in their favour. Planning ahead is key, most Independent Advisers will be able to help and advise you way before you intend on handing over your deposit to secure a new build property, so take advantage of this kind of service and avoid any last minute (nasty!) surprises....