Me: low credit score / Husband: excellent ?????

PinkLaydee

Hello
We are trying to move in order to reduce our mortgage to help me pay off £11,000 of various debits and generally make life easier. We are currently with Halifax. Our house is worth about £350,000 with current mortgage of £200,000, but hoping to buy for circa £280,000. My husband has an excellent credit score.

BUT! I do not... I have a default dating back to Oct 2005 from Mint (will drop off the file this coming Oct), was settled ages ago. I have also, in the last year, been stupidly disorganised with mail order companies and have a number of 1s on my file. My score is 311.

So, given that someone has just made us an offer (at long last), what is our best option?

1) Stay with Halifax as joint mortgage - are they likely to reject us? Or keep us? NB: No mortgage payments have ever been late.

2) Ask broker to find another joint mortgage.

3) Don't even bother doing joint mortgage, just do it in Husbands name and get a solicitor to do paperwork to cover me. Then remortgaged later once my file is clear.

Are there any other options? Which of the above is least stress?

BTW, my situation is due to looking after our kids for the last few years, went from earning £20,000 to £6,000 and have struggled to cope. It has caused lots of arguments / stress on marriage. So I really dont want to end up with more rows over this!

Thank you.

kingstreet

No way of knowing. Find a good independent/whole market broker and go through everything with them.

There are lenders who will ignore a default from that far back. It will be a question of finding you the best rate for your circumstances rather than actually getting you a mortgage.

You haven't said what mortgage you'll need on the £280k purchase, but under 75% (£210k) and you should be ok, subject to income etc.

PinkLaydee

I hope that if we buy for about £280,000, get an offer of about £350,000, the mortgage will be around £150,000. Husband earns £46,000, we have two children, I work part time and earn £6,000 (so it makes little difference to the figures).

So, as we have large amount of equity and good track record with Halifax, is it worth trying them first? I realise that 'porting' is not as it used to be and they do the same checks all over again.
Is it worth going for a chat with the Halifax and being honest?!

kingstreet

They won't be able to tell you their attitude without a credit check as Halifax is just "computer says no" these days.

With those incomes, two kids, no other continuing credit and a "C" pass credit score, Halifax would lend you upto £206k over 25 years. However, their products aren't great these days and I'm not sure if you were my client I'd waste a footprint on your credit file...

An independent broker would be able to fine-tune your case and establish the best deal to match your circumstances. You need to stop thinking in terms of "can we get a mortgage?" and start thinking "who's going to give us the best deal?"

Even paying a broker a fee of £500 could result in you saving a lot more than that from improvements in the product he could find for you. Look for one who charges on completion, then you know if he doesn't deliver, you don't pay. Some will even rebate to you any commission they are paid by the lender.

PinkLaydee

Ok thank you for your help. Am terrified the 'computer' will keep on saying NO and we will be stuck here with (ironically) a bigger mortgage to pay. It actually keeps me awake at night worrying.... So are you saying we are likely to get an offer, but possibly not at a great rate due to my credit score?

kingstreet

No. I'm saying you may not get the BEST rate, but that's not to say you won't get a good rate which is also the best for your circumstances.

If you've got an offer on yours, find yourselves a good independent or whole market broker. Friends or relatives may be able to help. Failing that try https://www.unbiased.co.uk but make sure you allow all the entries, not just the big ones which have to be paid for...

loulou5

I have read your posting with interest as we are in a very similar position. I think I will try our current lenders as we need to borrow less than we have now and see what they say. If its a no we will speak to a IFA or again could try putting a mortgage just in my other halves name. Good luck with your search.