What are the chances of getting a mortgage?

Mara69

I am looking for advice for a friend. Hoping someone can help. Based on the following information is a mortgage is likely to be achieved? The situation is that they have the opportunity to buy their council house (freehold). Property is likely to be valued at £195k (rough guess but pretty sure it is accurate within £10k either way based on previous sales). Discount offered will be £75k so the mortgage will need to be £120k. It is possible that a 10% deposit could be secured, one of my questions is would this be necessary given the huge discount?

It would be joint application, both parties are working full time and jointly earn £44k. Credit wise things aren’t brilliant. One of the applicants is a discharged bankrupt (discharged in 2004) but they are/have been debt free ever since. The other has defaulted on a loan and credit card due to losing their job about two years ago. Both debts would be partially settled (as per agreement with the companies for full & final settlements) before going ahead with the mortgage application and so would show as partially settled on the credit file. There are no other debts and both applicants have bank accounts with overdraft facilities etc.

So…is this couple wasting their time completely or is there is chance they will get a mortgage based on the (admittedly slim) information above? I am going to advise that they see a mortgage broker but wanted to get an honest idea of their chances.

Simon_gloster

The amount they want to borrow vs the loan size is good, about 60-ish%. Income sounds fine also (any depeendants do you know?)

Adverse credit may have an impact but there are lenders that offer mortgages in this instance. Tell them to disclose the bankruptcy if they apply, even though it won't show on credit reports anymore, the solicitors will do a check on them both for £2 each at some stage anyway.

I would say they stand a good chance of a mortgage, don't get hopes up of rates of 3-4% at this stage.

They have to see a broker, get their credit files looked at, then the broker will place a decidion. They could ring round lenders all day as far as you know getting declined left, right and centre.......and lowering their credit score potentially every time.

Mara69

Thanks, Simon. Sounds positive - oh and there are no dependents.