HELP! need to port mortgage but low credit ratings!

SARAHW83

Hello all,

Me and my partner moved into our 2 bedroom house which we bought for £104,000 and mortgage was £96000 6 years ago both with £19000 incomes and good credit ratings however since then we got into debt. Our house is now too small with a child and one on the way and we have been offered once in a lifetime chance of really making some money on a 4 bed house left by my nan to my father and his 5 siblings house is valued at £120,000 in current condition and my father has waived his £20000 until we are in better position so we can purchase for £100,000 and if we live there and modernise at same time house will be worth £180000 to £190000 as told to us by estate agents.

We got a mortgage advisor to let us know what mortgages was available and he said after looking at our credit ratings that he would not be able to help us!

Bottom line is im hoping to port our current mortgage (£85,000) to that property but cant find out until i actually apply wether we would get it or not, i checked experian and my credit rating 650 with one default and partners is 450 with 3 defaults however all debts are paid off and all show as settled but defaults stay on your credit profile still for 6 years!! so is it going to be impossible for us to move with our credit ratings how they are??? please help as we are putting house on market this week and i dont want to mess people around.

Thanks in advance

ViolaLass

What do you think your house is worth now? And what are your incomes now?

SARAHW83

Hi our house is worth £110000 now and our incomes are £22,000 and £23,000 and i spoke to mortgage company who said our incomes were eligible for up to £128000 mortgage so we are okay on that front we only need to change the address on the documents really as amount and monthly payment will remain same , its just the credit ratings and defaults letting us down:(

holly_hobby

Its not as simple as having prev defaults will scupper your changes of a mge - may restrict them yes - but not always rule you completely out.

No defaults are attractive to lenders, but a satisfied default (which you have) is much more attractive to a lender than unsatisfied - and although it stays on your credit record for 6 yrs, the original creditor should have marked the debt as satisfied (i.e paid off), and you should have your certificate of satisfaction to present if reqd.

Before the recent collapse in the banking and finance industry - there were many lenders who happily accepted adverse lending (i.e defaults, CCJs ) - but following the probs which started in the US, they are now tetchy...

The bottom line is to persuade an underwriter/lender that you are a viable and low risk borrower, some way achieved in explaining to them the basis of your recorded defaults, what or whom were they for, when were they recorded and settled, and most importantly, a reasonable explanation as to why you allowed the accounts to go into default in the first place. The amount of default (both singularly and collectively) will also play a part - but a big positive is that you have actually satisfied the debt - that demonstrates to the UW some financial responsability on your behalf. However, if you appear to have only settled the defaults, in order to appear more attractive for mge purposes, then the UW will look dimly on that - as your reason for settling was not morally based, but appears to have been one of need and manipulation instead.

A low LTV will also help you plead your case.

I am not sure what type of mge adviser you spoke to, an in house bank one, or one in an estate agency or a whole of market one.

Generally an experienced (whole of market) mge broker will have access to both high street, and niche/adverse lenders (if there are any still out there !), and/or has built good relationships with more standard lenders & their lender reps, and would be able to give you a more definitive feel as to whether there is any hope in the current financial climate. They will also have access and experience to possibly explore options that you haven't considered.

You may want to consider this option - if the original adviser was more restricted than the a WOM broker.

So all may not be lost - I can't promise though as obviously I'm not privvy to the whole story etc, and if the amount of defaults and basis for them are too hot in general, than you may not find a lender at all.

But I have tried to give a general guide to how your problem may possibly be overcome - and hopefully a successful outcome.

Hope this helps & good luck

Holly