Mortgage with bad credit - even with a BIG deposit??

cw1234

Hi All,

Thought i would post a discussion in the hope thaqt someone can help!

I have recently aqquired some money to put down as a deposit on a house, maybe 25/30% (around £20k / £25k)

Mine and my partners credit is currently poor due to some previous repayment issues but i am now looking to secure a mortgage.

My initial thoughts are that nobody would take us on, even with a very large deposit such as this, although the lender would automatically have equity in the house.

Can anyone advise on the best course of action for this circumstance?

Many thanks in advance all!

Chris

happybroker

This will all depend on exactly what your history is with "previous repayment issues". If you could be more specific we should be able to give you some pointers. We would need to know what kind of finance you had issues with, how long ago, did you get ccj's/ defaults, iva etc etc?

Conrad

Chis,

Your'e thoughts are correct, there could be difficulty.

A couple of lenders can consider you, one of which has rates from 5%, but others far higher. Max 70-75%

The exact nature of the adverse credit will be pivotal - how much, the dates, whether it was a ccj or default etc.

As for the lender having a lot of equity, this is neither here nor there, as the rules now require lending to be responsible and suitable - repossession is a last resort.

The lender needs to be satisfied you can make the payments on time in full, and that prior late payment tendancy is not likely to be repeated.

In case this interests you; Many applicants over the years say this to me - "but the bad debt was not my fault in full". 99% of the time it was the applicants fault - they failed to think ahead / put enough by to cover all eventualities / failed to double check a bill was paid on time (it is NEVER the supplies responsibility to tell you a debt has been paid, it is always yours to make sure it is paid no matter what).

The reason I say this is because underwriters will not likley be interested in an applicants emploring them to discount a bad debt - because the dog died / nan was ill / van broke down / Bank forgot to pay it.

Best of luck

cw1234

happybroker wrote: »

This will all depend on exactly what your history is with "previous repayment issues". If you could be more specific we should be able to give you some pointers. We would need to know what kind of finance you had issues with, how long ago, did you get ccj's/ defaults, iva etc etc?

Hey Happy Broker,

To confirm in more detail, my credit history is slowly building itself back up now but to be honest (well extremely slowly to be honest!)

When i was younger i got a £10k loan and £5k credit card, and i £1500 store card.

The credit card went over limit and i am on a repayment plan now. The loan is ALWAYS paid on time and is about to come to an end at the end of the year & the store card will be paid monthly on a payment plan.

3 defaults in total, but being paid on a payment plan.

No CCJ's or bankrupt etc.

Thanks again for your input and i look forward to more!

happybroker

You could have a problem with the fact that the cards aren't yet repaid. For a case that is rather more complex I would get a hold of your credit file, there are instructions for this on MSE and take them to a good broker (whole of market) so they can make enquiries on your behalf.

Going straight into the banks will probably end up with you having loads of searches done which could harm your chances further and a broker should know who they could and couldn't approach as some lenders are still a little more understanding than others at lower loan to values.

Good luck with it.

luckyfool

If you have no mortgage arrears, ccjs, bankruptcy, or IVA then with a 20% deposit there are options, but with much better rates with 25%+ deposits.

A decent broker should be able to give you some quotes and ideas of rates.

missprice

all you wonderful people on here :T

i have a similar problem but its to re mortgage

i now have paid off all debts in full but for 6 months of last year i accrued ccj's and had debt collectors letters
in all it was
my council tax, now completely paid for last year and will be paying this years no problem
one late payment on credit card and
a mobile phone bill for £15

like i say all paid now

so to remortgage i will need 17k yes 17k

will i even get a mortgage for such a paltry amount?
should i in fact bother to remortgage?
will i be able to stay with my current provider instead of remortgaging(will they do a check on me when this fixed rate runs out in july?)
will this mortgage just transfer over to variable rate? if it did i would pay the same or more and wipe years off it

many many thanks

i am having sleepless nights over this
eta house is worth around 100k maybe 120k

beecher

missprice wrote: »

i am having sleepless nights over this
eta house is worth around 100k maybe 120k

You shouldn't be having sleepless nights about it - best option is to stay with your current lender, and either go onto the SVR or get a new fixed rate if you're happier with that. How many years do you have remaining?

missprice

beecher wrote: »

You shouldn't be having sleepless nights about it - best option is to stay with your current lender, and either go onto the SVR or get a new fixed rate if you're happier with that. How many years do you have remaining?

thank you

will be 16 years left to go in july

was tiiny teeny mortgage to start with
is only 139 a month repayment on my fixed rate now
so if i went SVR i could presumably pay more if i wanted to reduce the term

beecher

missprice wrote: »

thank you

will be 16 years left to go in july

was tiiny teeny mortgage to start with
is only 139 a month repayment on my fixed rate now
so if i went SVR i could presumably pay more if i wanted to reduce the term

Check with your lender but you should be able to make unlimited overpayments while you're on the SVR. Increasing rates won't affect you too much but if you need the security of a fixed rate, see what your lender can offer you. You'd probably (?) only be able to overpay 10% of the mortgage a year while on a fixed rate though.

missprice

beecher thanks

was worried about changing to a SVR but you have allayed my fears

no i think i will just stick with SVR from July. as you say even a large increase in the interest rate wont make a huge difference to me and i no longer need a fixed rate (not right now anyway) because things have changed and i am a little more secure.

you have made me happy today

many thanks