shared ownership & default on credit report

mortgage?

Hi

After checking my credit file - equifax - the question now is:

With a total income (wages & benefits etc) of £30k do I have any chance of obtaining a 90 or 95% LTV mortgage with a default on my credit file?!

Looking to get perhaps £85k (50% shared ownership)? Anyone recommend any shared ownership and/or bad credit mortages or specialist brokers?


Sorry to repeat myself here. Didn't realise could edit
Thanks

Hi

I hope this is in the right place, and that these aren't daft questions!
I have searched the forums for similar queries, but none seem to quite answer my questions, so any help would be most appreciated.

Situation is that I have (just in the last week) been pulled towards buying - a 50% share of a shared ownership property.
My partner and I did always think that we would look into buying within, say 5 years, but house prices are still high here, and the new build SO seem overpriced... but this house has just found us, and it seems too good an opportunity to not even investigate.

The property is on a private estate of houses that are probably 30-40 years old. I have no idea how this particular one has turned out as a SO, as looking at other houses for sale on the estate, and knowing the area, I think it is a one off.
The price is £92500 for 50%. This seems a sensible valuation.
I have yet to hear back as to who owns the other 50%, and what the current rent is.

Problem 1: Because it is unexpected, we do not have a deposit saved. We do have some small savings, but these were for our wedding, next years holiday & general emergency etc.
We could - either scaling down wedding, no holiday, possibly gifts from family - only raise £5-10k deposit at the moment.

Problem 2: My partner has recently started his own business. Although it is doing OK, and is on track to his plan, the first year (10/11) took a loss, and this year is set to profit only £3-5k. It is not planned to take a respectable FT wage until yr5.
On this basis it looks as though I would have to obtain a mortgage on my own.

Problem 3: Affordability? How do lenders work this out? There are 4 dependant children- will this take a huge chunk off any mortage offer? I have used the Nationwide, Halifax & Lloyds TSB calculators- they are all saying I could borrow iro £100-£120k - this seems a bit much?

Anyway, my current income is:
£16k salary
£14k child maintenance, tax credits, child benefit (how much of this is counted?)

As far as I know my credit rating is good.

Might it be possible to obtain a (50% SO) mortgage on such a high LTV, with a relatively low wage?

All the shared ownership info I've found seems to specifically refer to new build housing association homes. Although I have looked at sharetobuy dot com - it seems they can act as mortgage brokers - are they any good?

Sorry to waffle on! I just don't really know where to start in researching. I don't want to start putting loads of searches on my credit file applying for mortgages that might turn out to not be right for this situation, and most importantly I don't want to waste these peoples time asking for a viewing if the lending is not likely to be available to me.

Many thanks in advance

mortgage?

Hi

After checking my credit file - equifax - the question now is:

With a total income (wages & benefits etc) of £30k do I have any chance of obtaining a 90 or 95% LTV mortgage with a default on my credit file?!

Looking to get perhaps £85k (50% shared ownership)? Anyone recommend any shared ownership and/or bad credit mortages or specialist brokers?

Thank you

m00m00

95% absolutely no chance
90% tricky, and you definitely need to speak to an experienced broker

affordability is going to hit you very hard, and the default will make things much trickier. How old is the default ?

mortgage?

m00m00 wrote: »

95% absolutely no chance
90% tricky, and you definitely need to speak to an experienced broker

affordability is going to hit you very hard, and the default will make things much trickier. How old is the default ?

Hi thank you for the quick reply.

Actually there are 3

2 are dated 25/07/2005 (should they be removed any day now?)

The recent one is July 2009. Its down to a dispute I had with a lender about a stupid amount (looking back I should have just paid it). The original loan has been marked as settled by the bank, but there is a default entry from a debt collection agency who took over the debt. At that point I gave up arguing about whether I owed it and settled a token payment arrangement with them . Its only about £90 so could pay it tomorrow if that would help?

Other than this I have 9 'green' accounts either settled or active but with very minimal balances- if spending on credit I always pay off the balance within 1 or 2 months.

m00m00

the 25th July ones, should drop off in the next week (equifax tend to take 7-10 days to remove them, experian quicker, call credit, well sometimes they need a kick)

you really need to speak to an experienced broker

this is likely to be a very complicated case unfortunately, as you have a near perfect storm of issues the mainstream don't like (shared ownership, adverse credit, low salary, high percentage of income via benefits, dependents)

mortgage?

m00m00 wrote: »

the 25th July ones, should drop off in the next week (equifax tend to take 7-10 days to remove them, experian quicker, call credit, well sometimes they need a kick)

you really need to speak to an experienced broker

this is likely to be a very complicated case unfortunately, as you have a near perfect storm of issues the mainstream don't like (shared ownership, adverse credit, low salary, high percentage of income via benefits, dependents)

And I guess that would mean a high interest rate too. Looking at the online calculators I would have to make cutbacks to afford paying over about 6%.
If you approach a broker and after s/hes does all the leg work for you, what happens if they either can't get any mortgage, or the deal they can secure is at too higher rate and the client backs out - do you still have to pay them?

On the other hand the zoopla estimate for the property is £145k rather than the £185k marketing price, so maybe it could go a bit lower

m00m00

it will depend on the broker, some charge an upfront fee etc, some only charge on you being made an offer.

Their fee structure is one of the first things they should explain to you.

With a perfect credit record, and a 90% deposit you are still looking at high 5.x %, so you would certainly be looking at more than 6% in your situation, and interest rates are only going to go one way, the only question is when.