Mortgage with three defaults

crazyhaggid

I'm looking for a bit of advice, long story short after loosing my job ~5 years ago I ended up getting three defaults on my credit file. I'm now working full time and have been for over two years. I need to move house as my OH is expecting our first and our current house is too small/no central heating/no parking nearby.

I'm looking to buy a three bed detached for ~£170,000 in fife, scotland, the house next door to me, which is basically the same as mine (as I live in a terrace) was bought just over three years ago for £105,000. I'm hoping to get something similar for my house although I don't know how realistic this is given the current market.

My current mortgage is ~£43,000 so I would be looking to borrow ~£108,000 given my credit file what are my chances of getting a mortgage and what rate should I expect? I was hoping my big deposit would help.

LilacPixie

few questions. How old are the defaults?? Are they settled?? Are they real defaults or just missed payments? income? other credit commitments? will OH be on mortgage? she have debt?? what is her credit history like??

You think you have 62k equity in your current home so need a 108k mortgage for new home. Do you now have savings for moving costs, fee's, stamp duty etc?

Basically you have not given enough information for anyone to even hazzard a guess but you would be best speaking to a mortgage broker who could co over everything with you.

herbiesjp

The most important thing will be to get an up to date copy of your credit files

You then need to state what your income is/are - does OH work as well? Will she be going back to work?

As Lilac points out above, there are lots of other questions that you need to answer first.

£108k mortgage on a £170k property means an LTV just under 65% - which could mean some doors open for you. However, depending on what the other answers are, they could close again.

crazyhaggid

Thanks for the replies, my current income is £27,000 a year but this will be rising to ~ high 30's low 40's in march when I change contract grades.

The defaults are now 5 years old, the debts are still outstanding and are as follows:

egg card ~£800 due to be paid off within the year
egg loan ~£4000 due to be paid off within two years
marbles credit card ~£1500 no longer paying this after they sold it to a cowboy collection agency, who hounded me and added £400 worth of interest until using this forum I found that the CCA was incorrect and therefore unenforceable.

I was planning on paying them off as soon as my income increased but I now have to move house.

My OH's employer have not been very good about hearing our good news so have cut her hours in half ( this is another story) so her income is only ~£8000 a year now.

Due to not having a lot of time to get this sorted out I was looking at a local development that are offering part exchange, my brother in law who used to work for Pickfords is moving our furniture with his friends.

herbiesjp

After 6 years they should come off your credit file - do you know when that is?

You may have some limited options available based on what you have posted, so I would get a whole of market adviser to look at this and discuss with lenders verbally, as you do not want to further damage your credit file by running credit checks with lenders that will just decline straight away.

crazyhaggid

thanks for the reply what's the best way to find a whole of market advisor? I live in Fife in Scotland.

herbiesjp

Can friends or family help?

crazyhaggid

herbiesjp wrote: »

Can friends or family help?

I don't mean to sound daft or rude but how can they help?

herbiesjp

crazyhaggid wrote: »

I don't mean to sound daft or rude but how can they help?

They might be able to help with a recommendation of a broker for you

crazyhaggid

herbiesjp wrote: »

They might be able to help with a recommendation of a broker for you

ahh I see! Thanks I'll try that but I don't think anyone of them has moved house recently.

HappyMJ

Are you sure the debts are still in default? It seems you were late paying 5 yrs ago and have made a payment arrangement. If you are up to date then the defaults will be ignored by some lenders. Your income multiple is just enough at the moment. Another idea might be to sell up pay off all the outstanding debt rent for a year having a perfectly clean credit file an increased salary and then buy in a years time being comfortable on a low interest rate rather than struggling on an impaired mortgage deal at some high interest rate because you weren't eligible for a prime rate.

You will need a broker to eliminate the deals that you are not able to apply for.

You will also have moving costs agency fees and so on which will come out of your equity so I doubt it will end up as 62k so don't restrict youself too much by only borrowing 108k it won't be enough to move into the new place with. I'd add another 10k buffer. You can always pay the rest off the mortgage once everything has settled if you need to. You might also want to consider wrapping the existing debts into the mortgage to reduce monthly expenses (depends on the rate of interest though). I'm just thinking you need to be as comfortable financially as possible with baby on way. They are not cheap and you do have enough equity to play with. There are some good deals starting at 75% so might i suggest borrowing 127.5k and work from there. Just don't go spending the extra on nothing.

Good luck...