I've got bad credit but my wife hasn't - can we get a mortgage?

StressedEd

Hi there

I got into £25K worth of debt about 4 years ago and have spent the last two years living a reclusive life in order to completely clear them - it feels great to be debt free at last. Unfortunately though I picked up a couple of defaults along the way and my credit rating is now pretty poor - I am unable to obtain even a basic current account.

Both myself and my wife now want to buy our own house and we have saved some money for a deposit. We have a joint income of approx £85K and although my wife's credit rating is perfect, I am the main earner, and I am concerned that because of my rating we are unable to get a joint mortgage.

So I guess my question is, what are the options out there for us? Can my wife get a sole mortgage but still taking into account my salary? Or can we still obtain a joint mortgage with my poor score, with her as the lead applicant? Or do we simply have to wait until my defaults have disappeared?

Any help or advice greatly received.

Thank you

holly_hobby

Without knowing whom the defaults are for , how many, and the £ amounts - the fact that you say you are unable to secure even a basic current account (which provides just a debit card, and no other frills) suggests that there is a murky old history there. (without wishing to cause offence !)

However, you say you now have a (comfortable) joint income of 85k, with yourself as main earner (and one assumes a saved deposit to hand) - so why not makes things a bit easier on yourself and satisfy your defaults ?

This would demonstrate to a lender that you have accepted responsbility for poor debt management/circumstances, and that now in a more favourable financial situation, you have taken the opportunity to duly repay your creditors.

If you choose not to pay your creditors but simply wait for the defaults to fall off after their 6th yr anniversary of registration, you will (in the meantime) find it v difficult to obtain any mortgage to which you will be party.

Your wife may be able to apply for a single named mortgage, of course in accordance with your wifes earnings (so borrowings will be lower), but if you are linked to her financially, this may well affect the success of her own application too, as will the LTV required.

Hope this helps

Holly

StressedEd

Hi Holly

Thanks for the reply.

I had two defaults, one for approx £8k and the other for approx £2K. Both accounts have been settled in full and I don't owe any money to anybody now.

However, the defaults remain on my credit file for another 3 years regardless of whether they have been satisfied and that is the problem I have. I tried asking the creditors to remove them as I paid them but they weren't having any of it.

I guess I'll have to wait.

Cheers

superbabe612

Don't give up too soon, there are lenders who will accept poor credit history if you have a large deposit; they look at affordability as well as income and defaults, etc.

Ask a mortgage broker for advice - I did, and I'm now a homeowner!

Good luck!

GMS

Your defaults are 3 years old so there will be lenders who would consider these.

How much deposit do you have? How much are you looking to borrow?

Best to speak to a broker as you may need a 'Near Prime' lender. Do not apply at random to lenders as this could harm credit score. It is important to apply to the correct lender for your circumstances.

holly_hobby

No even a satisfied default won't be removed by the Original Creditor (OC), as you have technically defaulted on a contractual credit agreement (albeit you have since remedied the arrears situation).

The fact that you have satisfied your defaults is extremely positive and not to be down played (do you have your certs of satisfaction ? If not contact the OCs for them. As a lender will want to see these).

In my opinion, you could initially sound out your enquiry with a whole of market broker, or a lender that doesn't credit score (i.e use a set matrix), whom will therefore have some flexability to criteria and be in a position to adopt a more individual approach to the enquiry (such as Ipswich BS - whom will lend nationwide direct, but do have geographical restrictions for intermediary business).

To be succesful with an underwriting decision, you need to be able to demonstrate that your circs have positively changed since the defaults occured, also push the fact that once in a more stable position you satisfied the DNs, and that the reoccurance of such a "blip" is unlikely given your current demonstrated financial circs.

As a guide (and without recommending), you could give Ipswich BS a call for a general chat (aka an AIP) - only progressing to a full status and credit check if you are happy with them & their products (possibly having also had a broker source a suitable lender & product for comparison), and they advise they feel your submission would be succesfull following satisfactory status checks (assuming of course that no other issues arise from their status checks).

Hope this helps

Holly

StressedEd

Hi, thanks for the replies and the advice - it's good to know there is some hope! Thanks again