Non comforming sub prime mortgages

wullbags

Hello, my husband and myself are thinking about buying a property, have ever we have a few skeletons in our closet when it comes to money. Over the years we have been in a considerable amount of debt, we had to sell our oringinal home to get sorted out and now we are in rented. During that time renting we have managed to pay off nearly £80,000 worth of debt by working extra shifts, studying and then achieveing my degree in nursing. We have not got a very good credit rating due to the amount of loans we had and also beccause there has been some misses payments on some accounts. I went to a mortgage lender and has said that I could get a non comforming sub prime mortgage. I dont really understand whats its all about. Never every want to be in any kind of dept at all and would appreciate if someone could give me advice on this type of mortgages. Dont know if the high mortgages would touch us or not, just fear of rejection, thanks :A

luckyfool

It really depends on the exact details of your "missed payment" history, and how recent it is. How much deposit you have as a percentage of the purchase price, your income and other factors will all also come into play when finding the best deal for you.

I recommend that you firstly each obtain a copy of your own credit reports through Experian or Equifax for the statutory £2 so you can get a good idea of exactly how your credit record is looking, and then take it either to see a face to face mortgage broker, or speak to a telephone based broker (normally they will be happy for you to fax or e-mail copies of the report over). Quite often if they are any good, particularly if they have experience of the non-conforming market they should be able to talk you through your credit reports, and explain the resulting implications on the mortgage deals available to you.

Even if one high street lender tells you that you should go down a "non conforming" route, that does not necessarily mean every high street lender would take the same view. Some are certainly more lenient than others, and a good broker should be able to help you either find the high street lender that will help you, or failing that source you the best non-conforming mortgage for your circumstances that allows you to repair your credit and get back to a "high street" lender in a couple of years.

Hope this helps.

wullbags

The missed payments were last year, we have about 25,000 to put down as a deposit, will be debt free thank god, I am now earning 19500 and my husband is earning 28000.

luckyfool

What kind of purchase price are you looking at? Anything up to £250,000 would mean that you have a 10% deposit to put down, though if you were at the upper end of that then you would be needing quite a high income multiple.

With a 10% deposit there are almost certainly decent options open to you depending on the exact details of your adverse.

Did either of you have any defaults or ccjs or was it just missed or late payments on unsecured credit?

If you did have any defaults or ccjs were any in the last 3 yrs whether satisfied or not, or over 3 yrs old and unsatisfied?

I am just trying to get a handle on things so I can tell you whether I think you have a realistic shot of getting a high street lender to do the mortgage for you, having said that many "near prime" deals from non-conforming lenders are very competitive and can actually match or beat many offerings from lenders on the high street.

wullbags

The property that we were looking at would be around £140000, we have no ccjs. I downloaded a copy of my credit file and there appears to be defaults x2 on them from about 4 years ago, they were settled 4 years ago. I seem to have a better credit rating with one company ie equafax and the other one is worse. Dont understand all this at all. Thanks for your advice though

luckyfool

Would be worth getting your partner to have a look at their own credit file as well to see if there is anything more recent, or serious on their file.

For that kind of loan amount with a £25k deposit it is pretty low risk business. Again I do recommend speaking to a broker but lenders that can take a quite lenient approach include Abbey and Chelsea Building Society (if Chelsea did accept you make sure it is on a high street rate as they do have adverse products also which arent always the best), this is just to give you an idea of lenders whom based on the limited information you have given me, might look at this for you. They may well not be the most appropriate or cheapest lenders for you based on your full circumstances and you should seek advice. Just make sure you declare up front details of any defaults, and an explanation for how they occurred and what has changed that makes it unlikely that they would reoccur or that you would have problems with the new mortgage.

wullbags

are you a mortgage broker

luckyfool

As per my signature, yes.

wullbags

dont know alot about mortgages brokers, are you independant or do you work with a company so I can get intouch and uses your services, if that would be possible.

luckyfool

I'll PM you my contact details as per the procedure set out by Martin. You can obviously also source alternate brokers through recommendations from friends and family which I would also encourage you to do.

wullbags

Thanks very much for your help, however I would rather use someone from your neck of the woods because we live in a very small community and dont want people to know my business.