2nd Opinion Needed - Poor Credit Rating

advic_2

I'm just after a little advice from some of the experts on the forum. We've seen our financial advisor and he didn't offer us particularly encouraging news, so I thought it might be worth asking on here to see if everyone agrees with him.

Me and partner are looking to purchase a new home. Current place of residence belongs to my partner and they have a mortgage solely in their name (property value around £150K, maybe £160K if we're lucky - outstanding mortgage approx £100K).

I have a disastrous credit report, although all of the bad stuff is quite old. A number of defaults totalling approx £40K (hangs head in shame), all defaulted in 2005/6 with the most recent default date being Nov-06. All defaults are showing as satisfied. No CCJs, bankruptcy etc

We were hoping to buy somewhere a bit bigger, value around £250K with a mortgage of £200K, but our financial advisor suggested that we had little chance of a successful application (at a sensible rate of interest) until Nov-12.

My salary currently approx £40K, partners approx £18K. I'd seen that the Post Office appeared to only look back 3 years at poor credit history and I'd hoped we might have a chance of success with them (or someone else). Would ideally want a joint mortgage or potentially something just in my name if that was acheivable. My partner is currently on matenity leave and we have 2 children.

Any opinions / advice would be gratefully received.

beecher2

The defaults will be on your credit file until 6 years have passed, so the Post Office will still see them in any credit check they do.

herbiesjp

What did your adviser class as a sensible rate of interest?

Are you paying back any of these amount still/ do you still have any outstanding debts?

At 80% LTV you may find a one or two lenders who can help but it will depend entirely on the overall scenario.

You will not go down the high street with this application, and I suggest you will need a good broker to place the mortgage - assuming it is affordable/possible to do so.

advic_2

herbiesjp wrote: »

What did your adviser class as a sensible rate of interest?

He suggested we'd be looking at a rate upwards of 10% with a specialist lender.

herbiesjp wrote: »

Are you paying back any of these amount still/ do you still have any outstanding debts?

No, all debts were paid by the end of 2007. I should add that I managed to get accepted for a credit card approx 12mths ago with one of those that specialise in poor credit applications and have used and repaid the balance in full on this every month since. I've also recently been successful with a card application with my bank (I wanted to take advantage of their cashback offer) and I was also successful with this (bizarrely they offered me almost £5K limit immediately although I only wanted / expected to get £1K at the best). This is also paid in full every month. I was under the impression that this might help to 'rebuild' my credit profile?

herbiesjp

Well you could be looking at mid to high 5%.

You will indeed be improving your credit history, as you will be showing your ability to raise and clear debt on a regular basis.

However £40k defults will still be out of the realms of the high street -and only a couple of lenders could help really.

advic_2

herbiesjp wrote: »

However £40k defults will still be out of the realms of the high street

Presumably, come Nov-12 (6 years from last date of default) the defaults will drop off automatically and I could look at high street lenders?

herbiesjp wrote: »

Well you could be looking at mid to high 5%.

I'm pretty sure I could live (and more importantly afford) a rate of less than 6% if the short-term. Presumably, as long as I was careful I might be able to get a deal on this basis for a couple of years and then re-mortage with a high street lender when defaults are gone? Prompts the question in my mind - would a high street lender raise their eyebrows when they saw the name of a previous lender on a property (ie would they associate it with a past credit problem)?

herbiesjp wrote: »

and only a couple of lenders could help really.

Any suggestions of names I could try?

GMS

Without knowing your full details there is no point in suggesting people to try.

As has been said there are some possibilities out there but you really need to see a 'Whole of Market' broker, and not one who suggests a rate of 10% upwards.

Much lower rates are possible but without a full knowledge of your situation it would be wrong to say where.

advic_2

Thanks for the replies everyone.

I thought the guy I'd seen was a 'Whole Of Market' broker - he's certainly an independant financial advisor, but he was adamant I'd be looking at 10% or more for a rate if I could get anything at all.

Is there any further information that I could post here that would be useful?

herbiesjp

Not really.

You would need to get a second opinion form a whole of market mortgage adviser.

You need to check if you IFA regularly transacts mortgage business (as opposed to investment class) - as if he does not, he may not be up to date with lending policy.

Other information needed would mean posting your life story really on an open forum, which I would not recommend.

Best bet is get in touch with a good whole of market adviser, and they will tell you what is needed.

advic_2

herbiesjp wrote: »

Not really.
Other information needed would mean posting your life story really on an open forum, which I would not recommend.

This is why I was trying to be as vague as possible!

Thanks for the advice - all the best.