'I Need Help Securing My First Mortgage'
Harding, Eleanor, The Independent (London, England)
Aidan Byrne, 34, is an English lecturer at the University of Wolverhampton. He is also writing a book on masculinity in 1930s Welsh literature and enjoys fencing in his spare time.
Aidan says he has the "perfect job", but like many people, he's having trouble getting a mortgage - especially because he works on short-term contracts and has no credit history.
"Being rich doesn't motivate me," he says. "But quality of life and an enjoyable job does. My worst financial fears are unemployment, never being able to afford a house, and not being able to live on my pension."
To make matters worse, Aidan is nervous after several colleagues were made redundant, with more cuts in education funding expected.
Helping steer him through the tough times this week are Danny Cox from Hargreaves Lansdown, Jason Witcombe from Evolve Financial Planning and Philip Pearson from P&P Invest.
Unfortunately for Aidan, the credit crunch has made lenders much more suspicious and less willing to take risks.
Cox explains: "A few years ago Aidan may well have found obtaining a mortgage much easier. Aidan's short-term contracts are not the stable employment lenders are looking for."
There is the option of going via a specialist broker, but the costs would be higher and committing to something would be risky if unemployment is a possibility.
In any case, Cox predicts the housing market is unlikely to push forward in 2010 so it's probably worth holding off for now.
It seems counter-intuitive, but Pearson thinks Aidan may be disadvantaging himself by not having a credit card.
"We each have a credit score," he says. "If you have a good track record of making credit payments then you increase your chance of being able to obtain a mortgage."
Aidan can improve his credit score simply through using a card and making payments on time - perhaps via direct debit.
Cox adds: "I am not suggesting racking up debt, but using the card for normal purchases and ensuring it is cleared every month."
However, Witcombe dismisses the theory as "an urban myth, no doubt perpetuated by credit card companies". Instead, he recommends saving a larger deposit to convince banks of his reliability.
The bigger the deposit he saves, the better the deal Aidan can get on a mortgage. It's time to get his savings to work for him - and that's not happening …
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Publication information: Article title: 'I Need Help Securing My First Mortgage'. Contributors: Harding, Eleanor - Author. Newspaper title: The Independent (London, England). Publication date: March 6, 2010. Page number: 66. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.
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