Will I get another mortgage?

Sparky0207

Hey everyone

I currently live in a flat which ive owned for the past 5 years. Due to having a baby I now need to start looking for somewhere bigger.

Im on maternity leave, due to return to work in September - although I'll only be going back part time and taking a big pay cut - from just over £18000pa to about £8000pa.

Im just wondering what my chances of getting another mortgage are. My partner has very very poor credit and so the mortgage is just in my name but due to getting into some financial difficulty 2 years ago, my credit isnt exactly brilliant!

My property is worth approx £125000 and my mortgage is just over £70000 so I do have a fair amount of equity.

A lot of people have suggested selling mine and renting until my credit gets better but im unsure if this is the right thing to do.

Many thanks

Annisele

When you say your partner has "very very poor credit" and your "credit isn't exactly brilliant", what exactly do you mean? CCJs? Bankruptcy?

How much does your partner earn?

TBH unless by "very very bad credit" you mean a few missed payments, I think you're going to find it impossible to increase your mortgage.

If you're only going to be earning £8k pa, then your existing mortgage is going to be nearly 9 times your salary - and no lender is going to lend more than that. If you want to borrow more, you're going to have to borrow in joint names with your partner - and whether you can do that depends on his credit and salary.

Sparky0207

Thanks for the reply.

He had a CCJ 4 years ago and quite a few missed payments since. I had a few missed payments but nothing more so I guess mine isnt too bad.

My partner is a business manager with a basic salary of £25,000 but after commission will be in the region of £40,000.

Im completely clueless when it comes to mortgages (if you didnt already guess!) but have no idea what to do for the best.

Does selling and renting for the time being sound like a good idea? I'll be back to work full time in 12 months but need to get out of here before then

Annisele

I think that selling and renting sounds like a good idea - but then I'm in the camp that believes house prices are going to come down. If I'm wrong, then getting off the 'property ladder' might be a bad idea for you. You'll find it difficult to jump back on it again in the near future and you'll miss out on potential price rises.

Sorry, but I think that your chances of getting a larger mortgage in your sole name right now are near zero. Even in 12 months time, if you are earning £18k then a mortgage of £70k would be nearly four times salary (which is do-able) but more increasing that mortgage would be a struggle unless mortgage lenders relax their criteria a great deal between now and then.

You might find it easier to borrow in a couple of years, once your partner's CCJ has dropped off his credit file. That would make him a much more attractive prospect to lenders.

Dame_Washalot

What size is your current home?
If it's a 1 bed then you may be better off just sitting tight for a year or two until you're both a bit more creditworthy
Your baby won't need it's own bedroom for some considerable time - in with you for the first 6 months and then perhaps you could put him/her in a corner of the bedroom/living room for a year or two, or even make a space in the hall

In the last property crash (late 80's/early 90's) I had a colleague with husband and 2 children in a 1 bed flat and they were in that situation until the youngest was two and the oldest four before they came out of negative equity. It didn't seem to harm them either emotionally or physically.