Mortgage Problems - Bad Credit History?

johnnybravo1888

Hi - 1st timer poster so please be gentle.

At the moment I'm in the process of looking for a new house and have saw one that me & my partner are going to put an offer in for but due to my bad credit history and a pile of debt (25K - not secured) (not sure about my partner - she's not on high income) I'm not sure if I would be able to get the mortgage I would be looking for which around 90K.

My partner and I combined income is 33K. I own a home which I'm looking to get about 60K for and my outstanding mortgage is 43K. I reckon I can pay of most the debt with the fund from selling my home and just start a fresh as I'm only 30 years old and have a bit of time on my side.

I'm looking for any advice possible on how I will be able to get a mortgage (joint application) to purchase my new home and unfortunately I need to move as I have new baby on the way and I do not have enough room in my current home. Any advice is grateful? Thanks in advance.

UK007BullDog

1. Pull a free credit record check off experian or equifax for both of you.
2. Go and see a broker for advice, with details of your outstanding debts, credit reports and income slips, it would also be helpful for the broker if you put together a expenditure sheet of your regular monthly spend.

A_Nice_Englishman

Lets do some sums.

Your house is worth 60K and the mortgage is 43K so that leaves 17K.

Assumimg you need 10K for a deposit, buying costs etc, that would leave 7K available to partly pay your debts which would reduce to 18K.

In total you will owe 18K (unsecured) plus £90K (mortgage) = £108K or about 3.3 times your combined salary. This sounds OK - many people say borrowing three times your salary is sensible and you are not much above this.

Now factor in your partner's debts (if any) and the fact she is going to have to give up work when the baby arrives and it looks like you may be struggling if you borrowed 90K.

herbiesjp

What is the bad credit history you mention? HOw did it come about? How long ago was this registered/satisfied?


Do you have a copy of your up-to-date credit file?

What is the purchase price of the property you are looking at?

If you are clearing your debts that will increase your affordability with lenders, however depending on the credit history, they will all view it differently and come up with different decisions

Your best bet is to have a word with a whole of market mortgage adviser and let them do the leg work for you

HTH

johnnybravo1888

A_Nice_Englishman wrote:

In total you will owe 18K (unsecured) plus £90K (mortgage) = £108K or about 3.3 times your combined salary.

Thanks for the advice. I was actually wrong in what I mentioned. The house we are looking at will be 90K so my calculations with a deposit of 10K would only be a 80K mortgage over 25 years.

My partner is going back to work after 6 months to 1 year.

[QUOTE/]What is the bad credit history you mention? HOw did it come about? How long ago was this registered/satisfied?


Do you have a copy of your up-to-date credit file?

What is the purchase price of the property you are looking at?[\QUOTE]

I'm not sure about the bad credit history but have received a few letters, etc. from debt agencies and have approx 2 defaults but I have payment agreement set up with these companies.

The purchase price is 90K.

Thanks

herbiesjp

johnnybravo1888 wrote:

Thanks for the advice. I was actually wrong in what I mentioned. The house we are looking at will be 90K so my calculations with a deposit of 10K would only be a 80K mortgage over 25 years.

My partner is going back to work after 6 months to 1 year.

[QUOTE/]What is the bad credit history you mention? HOw did it come about? How long ago was this registered/satisfied?


Do you have a copy of your up-to-date credit file?

What is the purchase price of the property you are looking at?[\QUOTE]

I'm not sure about the bad credit history but have received a few letters, etc. from debt agencies and have approx 2 defaults but I have payment agreement set up with these companies.

The purchase price is 90K.

Thanks

So will have cleared your debts

YOu will want a 90% mortgage of £80k and your joint incomes will be £33k

So far no problems.

However you will definitely need to find out about your credit history via Equifax or Experian - without knowing the exact details of the problems no adviser will be able to point you in the right direction. YOu could be applying all the way down the high street, getting declined, and further harming your chances of a potentially good deal

HTH

A_Nice_Englishman

Yep that sounds better.

Try hard to save until the baby arrives so get used to spending less and you have some money behind you while Mum isn't working and don't forget to budget for childcare costs when she goes back to work.

johnnybravo1888

A_Nice_Englishman wrote:

Yep that sounds better.

Try hard to save until the baby arrives so get used to spending less and you have some money behind you while Mum isn't working and don't forget to budget for childcare costs when she goes back to work.

Thanks all for the advice!

johnnybravo1888

Hi All

A little update on things, we have managed to find a house 30K cheaper than originally going for with little work needing done so should be able to afford without any problems.

Thanks all for the advice given.

Mark_petty

Hi

It sounds like you will be ok.

Don't worry about the baby costing you lots of money as its not 100% true. Me and my partner have a 6 month old and a 4 year old. I find that because you have to stay in and you can't do everything you want to you save lots of money. I know you have to buy nappies etc but if you get them when offers are on it doesn't cost that much. Also its worth finding out whether you will be eligable for any help such as working tax credit etc.

When I talk to my friends about babies etc they all say there is no way they can afford to support one. I really don't know why they say this as its no way as bad as what people think.

Good luck

johnnybravo1888

Mark_petty wrote:

Hi

It sounds like you will be ok.

Don't worry about the baby costing you lots of money as its not 100% true. Me and my partner have a 6 month old and a 4 year old. I find that because you have to stay in and you can't do everything you want to you save lots of money. I know you have to buy nappies etc but if you get them when offers are on it doesn't cost that much. Also its worth finding out whether you will be eligable for any help such as working tax credit etc.

When I talk to my friends about babies etc they all say there is no way they can afford to support one. I really don't know why they say this as its no way as bad as what people think.

Good luck

Thanks for the advice. I've been getting the same information about babies but to be honest can't wait.