Cant get a mortgage- i dont think!

groovysuzie

Hi there

me and my husband have found a property that we love however i have a few historic issues with my credit file.
Although i have not applied for a mortgage yet but i really think that i will get rejected or be on some sort of sub prime mortgage.

The problems with my credit file are

1. default from 5.5 years ago;
2. missed credit cards payments from 2005/2006.

Despite this my credit score is satisfatory 860 and my husbands score is excellent.

Im really scared to apply for a mortgage incase i get rejected and it makes things worse. what i am thinking is my husband could buy the house and then after the fixed term of the morgage is over and my credit history is repaired we could apply to transfer the property into joint names. Does anyone know if this is possible and if the lender will allow this?

obviously we dont wont to be in a situation where the lender refuse to do this and i can never become legal owner of the property!

Justin79_2

groovysuzie wrote: »

Despite this my credit score is satisfatory 860 and my husbands score is excellent.

Im really scared to apply for a mortgage incase i get rejected and it makes things worse. what i am thinking is my husband could buy the house and then after the fixed term of the morgage is over and my credit history is repaired we could apply to transfer the property into joint names. Does anyone know if this is possible and if the lender will allow this?

obviously we dont wont to be in a situation where the lender refuse to do this and i can never become legal owner of the property!

Hi Suzie,
I can relate to your feelings and situation as my partner and I have recently received formal mortgage offer, having been very uncertain as to whether or not we would get it, in part thanks to the huge amount of press about just how hard it is to get a mortgage at the moment.

To give you an idea of what we've learnt, debts (we had none but do have a car leasing agreement), deposit percentage (85% LTV for us), affordability and which property you are buying(we had an offer accepted well below the market value and less than half of the street average selling price), all mattered more to our bank than our less than perfect credit scores.
We had a combined credit score of 1600 out of 2000 with Experian and were very worried about applying for a mortgage and breaking our hearts if we were turned down and making things worse for credit scores in the future, even if we did miss out on the mortgage this time. We had no defaults but both had a late payment within the last 12 months. From what I understand, only records of the last 36 months matter. As it turned out, the mortgage went through earlier this month. We are heading to exchange of contracts in the next 2 weeks and I promised myself that I wouldn't post on a forum about it until we had completed, but here I am doing just that!

Although I can't speak for the rest of your criteria as you haven't mentioned it, the flaw I can see with your plan to buy in your husband's name and then add yourself later is that I suspect the affordability will not work. To give you an idea, the mortgage payments should ideally be 30-40 percent of your net salary, that's not wishful thinking, that's the percentages that underwriters looks for. If your husbands salary alone can achieve that and therefore leave enough left over for him to live in the house alone (from a cost pov) then that might work, otherwise you may be better applying together.

I'm sure if you make an appointment and chat to the advisor about your concerns, they will quickly let you know how likely things look. Our advisor said that the big concerns currently are the amount of unsecured debt applicants have and also the amount of available credit with other organisations that you could suddenly max out.

Hope this has all been of some help.

NeverAgain_2

...From what I understand, only records of the last 36 months matter...

I agree.

Lenders have relatively short memories and are not really interested in what you were doing five or six years ago.

As Justin says, affordability and loan-to-value will be far more important.

dreamdreamer

Agree with the posters above, we got a mortgage last year and our advisor wasn't in the least concerned about the late payments etc on my credit file (4 years old). She was concerned that we had a decent deposit and that we didnt over stretch because of my debt. She recommended a 25% deposit and a mortgage payment around 25% of our joint income (it's actually 15%) and advised us to close down most of our available credit. We got a good competitive mortgage.

NeverAgain_2

...and a mortgage payment around 25% of our joint income...

Back in the days of weekly pay packets, I was told a week's pay for the mortgage was affordable.

Seems that pitch to a lender still works today.

TRYINGTOSWIM

hi, we expected similar problems, having been turned down by our own bank(nat west). we found a good whole of market advisor as recommended on this site and he got us a very competitive mortgage through with no problems with santander. despite their reputation we havent had any problems.

i spent hours reading the posts on the house buying forum on here and found some really good info.
good luck

NeverAgain_2

Just spoke to my banking brother on another topic.

The subject of mortgages cropped up.

He told me quite a few mainstream lenders are now 'back in the market', so anyone with a reasonable proposal should find it easier to get a mortgage than they would have done a few months ago.

groovysuzie

thanks for all your posts guys! it really made me feel more confident in applying.

Anyway, we applied to santander yesterday and they did a credit check and we both got accepted Yay:j. we are putting an offer in on the property this afternoon!

caledonian_princess

Oooh, good luck susie and gratz for being accepted.

kelpie35

groovysuzie wrote: »

Anyway, we applied to santander yesterday and they did a credit check and we both got accepted Yay:j. we are putting an offer in on the property this afternoon!

Well done.

Hope your offer is accepted.