Bad Credit Mortgage

Goatess

I wonder if you savvy experts could advise what the chances are of being granted a mortgage in the near future? Here's some background info... following redundancy I got into some financial difficulty a few years back which resulted in two defaults; one from Grattan for £187, now settled and due to expire in May 2011. The other with the Halifax, (all bank charges!:mad:) due to expire Sept 2011, not yet settled yet but I pay off £50 each month. I do not have any existing credit, apart from a 'cashbuilder' credit card which is settled monthly. My credit score is 577, which I puts my credit score into the 'poor' category. I earn £26K, have a 20K deposit and would require a mortgage of 80K. Thanks for reading and any comments/suggestions and advice on how to proceed would be greatly appreciated :beer:

Goatess

Any takers?:o

Goatess wrote: »

I wonder if you savvy experts could advise what the chances are of being granted a mortgage in the near future? Here's some background info... following redundancy I got into some financial difficulty a few years back which resulted in two defaults; one from Grattan for £187, now settled and due to expire in May 2011. The other with the Halifax, (all bank charges!:mad:) due to expire Sept 2011, not yet settled yet but I pay off £50 each month. I do not have any existing credit, apart from a 'cashbuilder' credit card which is settled monthly. My credit score is 577, which I puts my credit score into the 'poor' category. I earn £26K, have a 20K deposit and would require a mortgage of 80K. Thanks for reading and any comments/suggestions and advice on how to proceed would be greatly appreciated :beer:

Pammy

Well the credit score on experian etc is not the same score a lender would give you. What you need to go back is the bad credit history on your file, in particular the one which is not settled.

But you have an interesting situation. If the bank charges are shown to be unfair then perhaps your default would be removed BUT lenders look at how you manage your account and if these charges are a result of you going over then it could be decided you are not good at managing your account.

Its the irony of the bank charges. I was in a situation many moons ago where my debit card was accepting payments of below 5 pounds, so every day I was buying a train ticket. I was not paying attention to my account (stupid of me) and I clocked up a huge sum in charges. When this money came out in one lump sum I couldnt pay my bill, that defaulted and I got into a terrible mess.

I'm now in a situation where I have two defaults.

Goatess

Hi Pammy
Thanks for your reply, I've found a property which is perfect so I'm hoping that I will be able to get a mortgage now rather than later and if my bank charges are refunded and the default is removed, that would be an extra bonus. I wish I had paid more attention to my statements too, 6 years with bad credit history seems like a very long time, but I guess like many others, I've learnt my lesson -only two years left to go and counting!

Pammy

Well thats the thing. I have learnt harsh lessons, I didnt even realise what a default actually meant. I wish was there something about life skills when I was at school. I remember the first store card I received, really heavy push in Debanhams when I was 18 to get one. That was the start. I was clueless and continued to be for a long time.

I hope you get a mortgage. I was advised to find a decent whole of the market broker. Make sure you ask for a quotation search, not one that will show up on your credit files. Lots of searches will damage your credit score.

mortgage-adviser-now

There is a reasonable possibility you can get a deal.

It will all depend on the Lender's individual credit scoring.

Don't waste time going direct to a Lender though as you need expert guidance from an independent source who understands the whole market.

Hope that helps

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

Pammy

Lots of people say find a decent one but how do you know who is decent and who isn't? Just word of mouth?

mortgage-adviser-now

Pammy wrote: »

Lots of people say find a decent one but how do you know who is decent and who isn't? Just word of mouth?

Like most things Pammy I guess you have to go on your gut instinct unless you have a recommendation.

Some Brokers have testimonials on their websites which may help.

A couple of simple things you may ask:

Check the Broker provides a whole of market service and are not working off of a limited panel of Lenders

Check their FSA registration via the FSA website

Ask about their experience

Check terms of business before you incur any cost

Finally, if they dont sound like they know what they are doing, that is probably because they don't.

herbiesjp

A slim chance indeed

Print off your credit file and discuss it with a whole of market adviser.

You have a very slim chance, but even if you could get the mortgage, you would need to make sure that it is affordable now and in the future when rates go up

Goatess

Hi All

Thanks for you comments..

I contacted Alexander Hall and they have said that there will be no problem whatsoever getting a mortgage with Beacon. AH charge a fee of £499 to act as broker and apparently could get a mortgage with an interest rate of 4% if I had 25% deposit and 6% if I have 20% deposit, I would also have to pay a 3% of the total mortgage cost to Beacon upfront with the 6% deal. The amount of extra costs concerns me, especially the broker fee of £499, can anyone recommend any brokers out there who deal with subprime mortgages whose fees are cheaper? I would of course prefer not to have to pay Beacon 3% arrangement fee, but I guess beggars can't be choosers!

Many thanks for any advice :A

mortgage-adviser-now wrote: »

There is a reasonable possibility you can get a deal.

It will all depend on the Lender's individual credit scoring.

Don't waste time going direct to a Lender though as you need expert guidance from an independent source who understands the whole market.

Hope that helps

I am a Mortgage Adviser


You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

herbiesjp

You can find brokers who will charge less

As for the fees attached to the deals, there is no possibility of changing those.

Just be warned that getting the mortgage to completion will be a long haul - the packagers I use are pretty good, but others are not so good, and the fund allocation can go very quickly - which means you may miss the boat in one month

Also be prepared for numerous requests of documentation if you proceed