Mortgage - How subprime should I expect?

glee76

Here are the key facts:

IVA completed 2 years ago.
Deposit available: £45000-£50000
Mortgage desired: £135000-£150000
LTV - Approx 75-80%
Income: £40000
Credit Files: All green and no debts. 1 x Credit Card paid off in full every month.


I understand the potential showstopper here is the IVA. Past mistakes learned from but I realise this black mark may always have to be considered.


What I would like would to be able to get a mortgage from a standard high street lender but I know the IVA may force me away from this. My question is, when sub-prime mortgages are mentioned on this forum, what sort of bump in interest rate should I expect if I were to attempt to get a mortgage in the next six months? And after reading on these forums that 3 years post-IVA seems to improve success rates, will it improve my chances of acceptance and of a better rate if I wait an extra year before applying?


Thanks.

ACG

How much was the IVA for?

Chances of a high street lender are probably quite slim, chances of a mortgage arnt that bad. Just because youve had an IVA doesnt mean you will have to be paying extortionate interest rates.
There are none high street lenders that actually offer pretty decent rates.

glee76

The total was £45k. It was joint with my partner following 1) stupidity 2) a very serious illness (I understand that the actual 'why' doesn't count for anything.)

ACG

Lenders may ask the reason why in order to be able to give it some human underwriting rather than just computer says no.

Ive just done a very quick search and the only lender i could find was 3 years after the IVA, so i could be wrong on my first post.. There is an advisor on here who specialises in adverse, he might know of other lenders.

bigadaj

Interesting that this appears difficult, I'm normally very cynical about these situations, but to me the size of the deposit would take most if the risk out of things for the lender. They obviously wouldn't want to repossess, but the equity would surely mean their risk is relatively low, if I wre lending I would prefer theOP as a risk as opposed to someone relatively clean with a 10% or less deposit.

ACG

Agreed, but they have to go off past history and an IVA in the background isnt great.

I imagine if you spoke to lenders they may be prepared to look outside their normal lending criteria due to the deposit size and income ratios etc but based on the brief 2 minute look i did it wasnt looking great.

Dave_Ham

Hi there,

Thanks ACG, joker card round for me..

I work alongside a few IVA companies supporting clients raising finance to achieve mortgages, pre IVA, in IVA and post IVA...

As common sense apllied by bigadaj, bigger deposit = better rates..

Depending upon other unknown variables, you can expect a rate from 4-5.5% other things being equal..

Your rate is likely to be determined by the skill and relationships the broker has, so expect to pay a broker fee but you will save this in rates...

Good luck



Dave

ACG

Dave_Ham wrote: »

Thanks ACG, joker card round for me..

Dave

Who says i was talking about you? :P
(I was though)

glee76

I do find it interesting how diverse replies can be on this website and I appreciate the advice offered so far.
I think the one true answer will come from an actual application. Delaying my decision to buy may help in acceptance but I am fed up with seeing money disappearing on rent.
One option could be to lower my expectations in the housing market thus decreasing the LTV in order to start increasing the equity. But I suppose in the long run, patience will probably lead to greater contentment.

Dave_Ham

Issue is that not everyone has the same starting position, some is opinion, some is assumption and some is fact..

I have personally arranged 50+ IVA mortgages in last 18 months, but applying directly blind or through an estate agent mortgage advisor would be reckless..

Your old IP firm may evenhave a firm they deal with who specialises in this...

maninthestreet

How have you managed to save almosr £50,000 in just two years if your gross income is only £40,000 p.a ?