Mortgage help??

neildow

Hi, I'm hoping for a bit of advice on a pickle I'm in.

My wife and I have put an offer in on a house that has been accepted after having a mortgage in principle etc. etc...... to cut a long story short, 2 mortgage companies initially accepted the application, for it then to be declined by the underwriters.

The reason for the declines is my credit report, I have a 9K default that was registered in Aug 2006 and settled in Sept 2010, since this date I have a perfect history. My wife has a squeaky clean history so she is not the issue. Anyway....... we are running out of time and options with regards to mortgages.... we have a broker doing some work for sub-prime but I'm really reluctant to get a huge interest rate. Hopefully I will qualify for main stream in 6 months when the default falls off...... but we want this house now... its a bargain.

The house value is 260,000 and we were planning on putting down a 25% deposit. Affordability is not an issue, our joint income is 60,000.pa. The default is holding us back.


So......we want the house......

My Father is quite well off and could stump up the whole 260,000 for the house (as an investment), but we do want to own the house.

My question is..... how (legally) can we buy this house with my Fathers help? He would want some return on his investment (just like he would if he invested it elsewhere) so we could in essence pay him interest over a few years until I could get a mainstream mortgage, then pay him back the full amount... but I am really out of my depth with this!!!!

My Father doesn't really want to own the house (he lives abroad), but would be happy with a second charge on it, I think.

Are there any other ways of doing this?

Many thanks

Thrugelmir

neildow wrote: »

The reason for the declines is my credit report, I have a 9K default that was registered in Aug 2006 and settled in Sept 2010, since this date I have a perfect history.

The default lasts 6 years from date of settlement.

At £9k it is significant enough for underwriters to decline.

A perfect history will take the full 6 years to obtain. There's no short cuts.

emmalee1985

My understanding was It was 6 years from date of default not settlement.

neildow

The devils! This is why I am looking at help from my Father. Any advice on how I may tackle this with my Fathers help?

Dave_Ham

Few things and there will be a solution here so lets take it top down..

Guessing the 2 declines are from Abbey (would almost guarantee) HSBC or Nationwide?? This does make a difference, trust me

Did the broker ask the lenders if a bigger deposit would mitigate their stance on the default?

Is there anything as to why it defaulted and why so long to satisfy that would placate an underwriter...?

Lets start here for now..

Thrugelmir

emmalee1985 wrote: »

My understanding was It was 6 years from date of default not settlement.

Until settled the account remains in default.

Default means not paid to terms.

Not just non-payment.

neildow

The two declines were from co op (just tried my luck as it was 3.39 for 5 years fixed) then the Halifax who were meant to be more lenient.

We now have a broker on the case who has spoke to some underwriters that have said no, but he said he does have some that will consider it if we can provide our credit reports.... I just don't want to pay a high interest rate if my Dad can get involved at this stage.

I pretty much got into trouble a few months after taking out the loan, so it took this amount of time to settle it through a debt management plan.

Is just seems really hard to buy a place when we have a 25% deposit and a relative who could buy the place outright.

neildow

I have explanied the default to them... basically screwed over after a relationship break up.

emmalee1985

My husband has a default registered so I have done alot of research as we hope to get a mortgage.

Experian and Equifax both state that a default recorded on your file will remain on your file for 6 years. - Not saying that the amount is isnt payable after this, and the company may choose to apply more action.

In my husband's case he defaulted Sept 2008 and settled March 2012. This will be removed from his credit report in Sept 2014.

neildow

Thanks for that. I understand about defaults. What I'm wanting help with is how to approach the mortgage situation, and if getting a mortgage is not an option, how can my Father (who has the cash to but the place outright) and I buy the house now, and them me get a mortgage when my credit is better - and pay him back.

sazandy25

I would get a solicitor involved and get you dad to buy the house as his, then when you are able to get the better mortgage rate, when your credits better, buy the house from your father. I would use the same solicitor for both transactions so they would know the situation.

I can't see any problems with that, but I'm no expert.