mortgages for people with adverse credit rating

golfillini

Hello All

I am new to this, so bare with me.

My question is:

We are selling our present house to settle the majority of our debts and then going into rented accomadation for two years.

We then hope to step back into the market and purchase a property. Would we find it difficult to get a mortgage and if so how much deposit would be required

If you have a poor credit rating what are the options when it comes to buying a house.

Regards

Golfillini

_Andy_

Specifically what adverse credit?

golfillini

We have an informal arrangement that is ongoing with our creditors for about two years now

We have defaults issued against us, but no CCJs'

All our debt is defaults come from unsecured creditors

stebiz

golfillini wrote: »

We have an informal arrangement that is ongoing with our creditors for about two years now

We have defaults issued against us, but no CCJs'

All our debt is defaults come from unsecured creditors

I would stay put. If you sell you are likely to need at least 15% in 2 years time, assuming the mortgage market doesn't get any worse. You will also be hit big style with adverse mortgage interest rates! You will have a battle on your hands. Do you need/want to move??

golfillini

Thank you for the advise

We have to move as my job has transferred to a distance that is not commutable

In two years we hope to have a 20% deposit. Would this amount be enough to get a reasonable mortgage rate.

stebiz

You'll get a mortgage but the going rate will be good 3% above the standard rate. So on a £100k mortgage you could be stung 3k a year.

Check it out for yourself. How about renting your place out and therefore renting somewhere else for a few years. That way you keep yourself on the housing ladder.

If not, then pay the extra for a few years. Quite hefty though!!

Conrad

stebiz wrote: »

You'll get a mortgage but the going rate will be good 3% above the standard rate.

This is nonsense advice.

How do you know they WILL get a mortgage?

There is tons more information needed before anyone would know whether a mortgage might be possible.

For a start will this 'informal' arrangment show up in the credit records in 2 years time and what EXACTLY will show on a computerised report? An 'informal arrangment' can mean different things to different people. I've had clients say they have one of these but when a search is done it does not show up as 'inforaml arrangment, never mind, we're ok with it', it shows simply as 'default' or 'missed payments' etc etc.

I have people with very good records that fail credit score, so there is zero way you will know what thier score will be in 2 years time as suych scores depend on many things unrelated to credit payment profile history.

OP - NO ONE knows, your'e quastion is like asking 'will I get good weather in Cornwall in 2 years time'.

I'm not being rude, all you can do is suck it and see, but one thing you can take affirmitive action on is settling all those debts now.

Lenders do not like cases where people have not honoured debt agreements as per the ORIGINAL terms you signed up to, where they then make new arrangemnts (meaning they break the original terms - underpay) and then drag it out over years.

Imagine you are an underwriter - ', mmmmm this person has not paid on time in full on 'x' debt so we have NO EVIDENDCE they will pay the mortgage on time in full'.

Cheers

stebiz

You might find this more helpful. I can't give any advice, as although I used to be a Financial Advisor for a number of years, I chose a career change.

This is designed for Professional Use only, but is in the public domain, and gives an idea of what you can expect. Again, not advising anything. Read yourself;)

http://www.kmc.co.uk/etc/medialib/investec_media_library/kensington/pdf/intermediaries.Par.16307.File.dat/KM00108%20170510%20Product%20Guide%20BTL.pdf