Mortgage Advice (Bad credit but BIG Deposit)

Robsmith88

Hi,

As the title suggests, I am looking to take out a mortgage in the next few days/weeks and am looking for a bit of advice.

The house price is £218,000 and I have an £88,000 deposit so will need a mortgage of £130,000.

At present i have a couple of £500 credit cards that are not at their limit, these get paid with more than minimum payment each month.. I have a couple of overdrafts, one at £2700 and another at £490 which also have regular payments to them. I have been renting for the past 10 months but before then I had a mortgage - I had my last house for 3 Years, the first 2 years I had a fixed rate mortgage which i did default on a few times, after the fixed period i changed to another provider where I had to use a sub-prime lender called Rooftop Mortgages. Last year i sold the house and repaid the mortgage in full along with their £7000 penalty for early redemption. Earlier this year I opened a current account with Abbey and was refused an overdraft...

I will be applying for a joint mortgage with my mother who has an excellent credit history - she is retirement age but can be joint on the mortgage with her pensionable income taken into account. we have more than enough wages to cover the £130,000 required on the mortgage.

(a) Do you think it is likely we will get a mortgage with the current lending situation bearing in mind we have an £88,000 deposit?

(b) Are there any more lenient lenders out there at the moment.

(c) I have a meetign at C&G booked for Wednesday - would it be more adviseable to talk to somone independent before C&G do searches on our credit history?

Hope you can help

Thanks in advance.

luckyfool

C&G credit scoring is extremely tight just now.

Do you have any actual defaults on unsecured credit as well, or ccjs, or is it "just" mortgage arrears?

To be honest I would apply for your credit report from Experian and either take it to a good whole of market broker, or if dealing with one over the phone fax it across to them and they can assist.

My inclination would be that C&G will not do it, and their credit search leaves a hard footprint meaning a decline with them is just going to hurt any applications to another lender.

Given that you are under 60% ltv there are "sub prime" options that would get your rate under 5-5.5%, but depending on the credit search there may be mainstream options. In your circumstances going direct to a lender is probably going to be the wrong move.

Robsmith88

Thanks, I'll get my credit report and seek out an independent advisor i think.

Cheers

_Andy_

I wouldn't waste your time with C&G.

herbiesjp

Defintely get a copy of your credit report and discuss the information with a good whole of market broker - one that can search direct only deals as well as broker deals.

What is your income?

Are you sure you want to put your mother onto the mortgage? Can you sole income not cover the mortgage?

If you have bad credit you will create a financial association between you and your mother, and it may end up causing her problems.

The deposit you have will mean that if a mainstream lender cannot be found, you will be able to find pretty decent adverse rates, and also get higher income multiples due to the lower LTV

Robsmith88

Hi, Thanks for this - My sole income is £30,000 pre-tax and i will need to borrow no more than £130,000

the reason I was looking to put my mother on is that her good credit rating might help balance out my poor one and along with the large deposit may put us in a position where I can get a mortgage. Would you agree that this would help?


I've been trying to get my credit report this-morning from Experian and am having the same trouble as i had last time - login doesn;t work etc etc - last time it took me 2 months to get my report from them... anyway, that's a different matter...

herbiesjp

Putting your mother on would not help - in fact it could lower her score.

With that LTV and that income, you should be able to find a deal in your sole name

Have a word with a good whole of market broker, once you have managed to get you credit report as that will help them source the best deal for you

luckyfool

Agreed, it's a common misconception that adding a good credit score to a bad credit score will help. If you have adverse credit that is unacceptable to a lender, adding someone with good credit to the application will still lead to a declined application, and will also create a financial association which could disadvantage your mother.

Unless there is a compelling reason (i.e. your mother was putting money into the property) then I would stick to it in your sole name.

Robsmith88

Have ordered my Experian report over the phone (i think) with one of the most long-winded automated systems i've ever come across... who knows if i will get it or not..

Thanks for the advice

bigchief56

Some one please help me.

I have a terrible credit history, loans that went unpaid for 5 years, and I mean no payments at all, and a few CCJs.
I have since paid these loans off, all be it at a reduced settlement. I have been told this will still seriously affect my credit rating.

I want to buy a house, I have a 70000 pound deposit and a flat worth 40000 pounds in Odessa Ukraine I could use as security and want to borrow 110000. Am I going to get a mortgage? I have a good job now, I earn 350000 a year and my partner is on 25000. HSBC refused me as did NATWEST.

Any advice would be greatly appreciated.

GMS

When were the CCJ's put in place? How much for? any defaults? Any missed payments on unsecured credit in last 2 years?

Do not apply to any more lenders as it will impact in credit score. It is important to apply to the correct lender for your situation rather than applying at random.

Get copies if your credit reports from Experian, Equifax and Call Credit and pass them to a broker. Get the £2 statutory ones online.