Bad credit but has affordability help?

DansMum_2

Hi this is behalf of my Mum who is desperatley trying to get a new mortgage having just sold her last home.

She is in a bit of a pickle credit score wise, although as of today the funds are finally being released so she will have no credit card debt, no overdraft and nothing nasty outstanding. She has an offer accepted on a lovely house which is cheaper to run and buy than the previous house. She wants to borrow 30% LTV

The problems stemmed from her partner who racked up massive debts and these were on the joint mortgage (arrears up to date and settled) and his ex buisness. He is bankrupt. She wants to buy the house under her own name. I have printed off her experian report today there are 5 lenders showing historic arrears. Recently she accepted a new job the other side of the country and I had to finance the car to get her there and back! Her file has been searched 6 times in 3 months.

There will be £190,000 deposit, the mortage amount requested is £98,000. All other debts are now clear. She earns £58,000 p/a and all lenders agree that there is affordability but they refuse to lend, even the previous lender C&G. Her own bank is also refusing.

She is getting really upset and frustrated that she may never own her own home again! I know this doesnt look good and apologies for the ramble, but I wondered is there are any brokers who would help? Or any lenders who would be sympathetic.... Thank you for reading my ramble!

_Andy_

Hi - I suggest she speaks to a whole of market broker. No point trying any high street lender as they will all be straight declines.

beecher2

I suppose her options are to rent until her credit file improves, or to buy a house for £190,000 and be mortgage free. Has she been to see a mortgage adviser?

DansMum_2

Thank you for your quick replies!

She has been to see Lloyds with regard to C&G relending, but although they were happy with a £104,000 mortgage they were'nt with a £98,000 one! She has an appointment with NatWest this afternoon (who she banks with) who are not hopeful but have said we cant say no without putting in an application. This will obviusly have a further impact on her credit file!

The reason she's buying this house is we have horses and the bank want her to save money (sounds ironic) but as she already paying £350 p/m in livery fees this would go when the horses are at home therefore saving more money....

This may be cheeky but is there a whole of marketr broker anyone could recommend??? Many thanks again

_Andy_

There isn't any point in her applying with Natwest - with that adverse credit it will be a decline and also another credit search on her file. High street lenders aren't going to lend with missed mortgage payments etc. She needs to get a copy of her file and approach a broker who knows what they're doing. Simply going round each lender hoping they'll approve it isn't going to work and will damage her credit file further.

DansMum_2

Yes exactly. I have called London and Country and ALexander Hall. Both say that because the mortgage arrears are showing within 3 months then its unlikely she'll get a mortgage for 12 months...

She has a nice letter from C&G telling her the arrears are now clear, maybe worth trying to get the file updated to show this... The other bad credit she has will not impact too much but it looks pretty futile....

Glad I didnt inherit the lack of money sense......

Thanks again for your help

_Andy_

The file will show them as paid, so something like

0021

For example, i.e. in the above it's showing that month 'one' was missed, as was the second, then it was made up in the third month. This won't affect her chances though I'm afraid.

DansMum_2

Fair enough thanks anyway!

I'll look for rental properties then try again next year

herbiesjp

Your mum may have one chance.

What is in her favour is the LTV and the income.

High street will not touch, but one specialist lender might.

It will depend on the information on her credit file. Also other information like property type may put it outside criteria.

Get in contact with a good whole of market adviser and let them see the credit file - do not run up any more credit checks, as that could harm any chances of applications she may have.

delerium

Hi Dansmum,

I may have an alternative to the doom and gloom of above. I was in a similar situation to your mum without the lovely ltv that she has. I had affodability but a shocking credit past. I was advised by my housing association to look at the local credit union who offered mortgages.

They too work on the basis of affordability and sit with you and discuss the blemishes on your credit file and if you can convince them of why issues arose and they are happy with your answers then they will consider the risk.

I haven't got the best deal on the market but I also don't have the shocking stuff that some adverse credit lenders would charge.....worth looking to see if there is a credit union nearby which offers a similar service?