Ftb-help Finding Mortgage

f1slikki

Hi there, and thanks for looking and hopefully giving me some pointers to which way to turn.

I am a FTB have reserved a property which is new build & I am getting an 80/20 shared equity deal with builder due to LTV with new builds, I also have a further 5% deposit therefore I am looking for a 75% mortgage.

I have had a broker look into things for me & said that the best mortgage company for my situation would be Abbey however after 8 hits on my credit file & several AIP's later (application has been on-going for around 2 1/2 months) I have now been declined due to affordability and undisclosed credit commitments, I have been advised to check my experian credit file & it shows what I declared- a few credit commitments all up to date with no issues & 2 previous defaults 1 for £100 & the other £50 which were pay in January 2008, however I was advised that if I get a loan for the 5% deposit that this would not cause any problem as this was checked with Abbey & they were fine with it therefore this is the only commitment which was not originally declared (as I didnt have it then) but broker should have updated this on application. I am now wondering why Abbey are coming back saying this when they have done all these previous searches and been fine with things however now I am being declined after this loan has gone through & been updated on my credit report it makes me wonder if it is the loan which has failed me but nobody will tell me.

sorry that this is long winded but I am trying to see if anyone else knows of any other mortgage companies that I could try that may be able to help, I know with the current market that things are alot tighter and not alot of providers do builders shared equity that is why I am turning to the wisdom of you guys.

I need a provider who would accept my 2 settled defaults, do shared equity & would allow either 80% LTV (whereby I would pay the loan back) or 75% LTV with me paying 5% deposit.

any help on this would be very gratefully received, I have heard of companies who deal with adverse credit, etc but charge higher rate however I dont know what companies to even begin to try, I also dont want to have too many more hits on my credit file so i'm in a catch 22 situation.

many thanks

tootiefrooties

Correct me if i've misunderstood, but I think you're saying that:

1- you got a loan to act as a 5% deposit
and
2- you defaulted a payment for something in january 2008

If these are both true then it sounds as if you haven't been planning a mortgage application very well! Sorry, I don't want to sound mean but defaults look really bad on a credit score, especially so recent, and you should have been preparing a clean slate before an application as big and serious as a mortgage.

And if number 1 is right, why on earth would you get a loan as a deposit?! That simply doesn't make sense. A deposit is cash... unborrowed money. that's the point! Did the bank honestly suggest this?! I thought most places asserted that a deposit had to be readily accessible funds such as savings, not new borrowings. Of course this will put more strain on your credit score, and may even reduce how much you can borrow if they decide that you're going to be overstretched.

I'm afraid that I don't have any great advice, other than hold out for 6 months and repair your credit score by meeting all payments and not applying for anything else.

Good luck anyway!

f1slikki

thanks & I understand what you are saying but to answer your questions: yes I was advised by my broker to go for a loan as criteria changed on LTV from 80% to 75% and I was advised that this was checked & okayed for new AIP by Abbey I advised that I could have held out a few weeks & got the 5% but as I assume a mortgage broker knows best I took their advise.
secondly: my defaults were both paid in January 2008 they were defaulted from 2005 which I only found out about by doing credit check when I decided to look at my file in order to start checking for mortgages.

So you think my best option is just to wait.

thanks

MarkyMarkD

If you are buying an 80% share of a property, and putting up 5% of the original value of the property as a deposit (if, indeed, it was your own money) then that isn't a 75% LTV at all.

The LTV is 75/80 = 93.75% of the purchase price you are actually paying for your 80% share.

The 20% other share is irrelevant to the LTV calculation because you don't own it.