Second mortgage, shocking credit, but much ££

Legacy_user

Second time, as the PC ate my post!

Basically we need to move to reduce the traveling involved to work (I telework, so can work anywhere)

We don't want to sell our current house, but we have a long term tenant chomping at the bit so to speak that would more than cover the mortgage we have at the moment. We have about 10K equity in the current house.

The better half now has a professional job, but a shocking credit rating due to defaulted loans etc as a student. I am just coming out of an IVA.

However, Worst case scenario, we have a cash surplus of £2.2K/Month. Some months it will be over £3K a month. This is after all the bills and household expenses

We require a mortgage of approx 95K, but we can put down a 10K cash deposit within a couple of months.

Do we stand anywhere near a realistic chance of getting a mortgage on reasonable terms ?

I know I should talk to a independent financial advisor, but at the moment I am just trying to get a sense of if it is possible before we commit to seeing one.

Cheers

13000

ACG

Probably not, although you have 10k, in reality thats only a 10% deposit. Theyre not the easiest to get at the best of times.

EDIT: sorry that was quite negative. I would still go and see a mortgage advisor as im just giving an opinion. The situation might not be as bad as you think, but i just wouldnt hold my breath unless you can double the deposit.

System

Hi,

Thanks for that. Don't worry re: being harsh. I think you just confirmed what I suspected. Would it be worth delaying it by a year perhaps to help the credit scoring look a bit healthier?

The annoying thing is that the cost of the fuel and travel is actually 1/3 as much as the actual current mortgage.

Thrugelmir

13000 wrote: »

The better half now has a professional job, but a shocking credit rating due to defaulted loans etc as a student. I am just coming out of an IVA.

Get your financial affairs in order and pay the mortgage down.

The IVA will count against you with mainstream lenders for some years yet.

ACG

You need to show that since the IVA you can be responsible with money (im not saying you wernt, this recession caught a lot of people out). From a lenders point of view its a lot of money, they want to ensure theyre going to get it back and not have to drag you through various courts to evict you.

As thrugal has said, this will have some effect on your credit file for years. Any mortgages your looking at with banks etc i would forget. I think you would be looking at rates closer to 6% and thats with a larger deposit.

My personal opinion is that, if you can put away £2-3k a month do it, once you can get a 20-25% deposit you have a much better chance of getting a mortgage. Your not looking for a huge mortgage, so it should take less than a year (going off your figures) to get that deposit, by then your credit file will be better but probably not enough to look at high street lenders.

System

Thanks for the help guys. I do understand what you are saying. It also makes good sense as well.

Just put all the money to one side, and then put it all on black. Double that dosh in no time! (I joke about the putting on black!)

ACG

(I joke about the putting on black!)

More of a red man myself too :P

I would still suggest seeing a broker, they can atleast give you some things to aim for - deposit wise etc. So atleast you know what your working towards.

Thrugelmir

You've a good income which will enable you to reduce your mortgage debt and obtain a better product with your current lender in due course. In the longer term this will place you in good stead for a move to another property. Keep the dream alive.