Other forms of income for mortgage?

mac2lrk

Hi
I'm looking for some advice please .
I have recently divorced and currently managing to pay a mortgage of £940 on the FMH. I would like to sell this - move on and hopefully try and buy a little place on my own.
I am currently looking for work, and recieve a considerable amount of maintenance through a Court Order and this, with tax credits and benefits make up my income. I would have about £40,000 in equity. I don't have a good credit history, basically through association to my ex and because of a charge order in his name that was placed on the FMH 2 weeks after I filed for divorce. This would be cleared when the house is sold. I have contacted creditexperte and experian and updated the information on there to explain the situation. Are there any lenders who would consider me?

Dave_Ham

Hi there,

What purchase price would you be looking for?

Additionally, do you know exactly what has been registered on Experian and Equifax; Specifically the values, dates and whether they were missed payments, defaults and/or CCJ's?



Cheers

Conrad

Likely only subprime lenders will consider this and they tend to want Bank statements. They can consider court order maintenance but it will be touch n go and depend on how sustainable and robust they believe the overall picture to be.

Is there anyone else's name you would consider putting on the mortgage and deeds?

mac2lrk

I would be looking for a mortgage of around 50-60K together with the 40K deposit. The bad credit comes from a loan which was taken out in 2003 for 16K and now has 11K outstanding which my ex had a DMP on, they refused to accept it and put a charge on the house, and also a bank overdraft same thing but no charge order. Both credit reports have this on and because we still have joint mortgage and on deeds - i am associated to the debt, I've explained that it has always been paid, that no payments have been missed and that he tried to negotiate cheaper rates.
I may have to approach family members who might be in a position to put themselves on the mortgage, or try and look for affordable housing, pat ownership. I can prove the money coming in, which is around 26K but I think it will be the association to the debt that will cause the problem, even though it will all be cleared upon completion of the house sale.

Dave_Ham

Does it show as a default on your credit file.

I deal in these adverse cases all day every day and given the information provided so far, I would expect a sensible solution.

You will be best speaking with a broker mind you, as many of the highstreet banks will not be keen on this directly.

All the best

holly_hobby

The charge on the house would have followed the registration and non payment of the CCJ - so I would expect there to be a CCJ registered for between 16k - 11k (whatever the defaulted amount was, which would inc unpaid interest).

Whether the OC has removed the CCJ, following the successful petitino for a charging order (CO), is doubtful, but not impossible.

The bank unpaid OD from reading, doesn't appear to have reached a CCJ or CO stage - so is probably a default.

I can understand Mac, why you would feel the redemption of the defaulted debts and your divorce should simply be the end of the matter - but lenders look to the history of how you have managed liabilities along the way - its a good measure of the applicants attitude to financial commitments.

Unfortunately, you are guilty by association here - as the actual default of debts occured whilst you were married to the debtor. Thereby the lender will assume as Spouse's that you were both party to the debt (derived in your case from benefit), and knowledgeable of the debt and its non-payment.

You say the CO didn't occur until 2 wks after your divorce, but the issue is a CO doesn't appear for a significant amount of time, following the inital default of the debt, which is proceeded by chasing letters, then docs declaring the proposed registration of a default if not remedied. Followed by a claim order submitted by the OC to the Courts for payment or the registration of a CCJ (wherby the court sends copy claim forms to the debtor for the action). And then its only after the registration of a CCJ, which the debtor ignores, that the OC may then petition the courts for the registation of a CO (which aren't always granted).

So you can see the kind of timeline we're talking aoubt, and why although the CO was registered 2 wks after your divorce, the events started sometime before that, and why the lenders will deem your association in a negative light.

The only thing that may mitigate this with a lender, is if you could demonstrate that you were not living together as Husband & Wife, during the timeframe for the appliation of the finance & subsequent non-payment, and flurry of letters and communication from the OC and later Court, that would have proceeded the CO. Thereby because of the marital breakdown, you had no prior knowledge of the unpaid finance/OD (if this bank acc was in his name only), and thereby were wholly prevented from influence or opportunity to repay/maintain the errant accounts before they reached the critical stage they did.

If this isn't the case, then you'll understandy why in a lenders eyes, the issues by association will linger over you too.

The best way to handle this (IMHO) due to the size of the defaulted accounts, is to satisfy (fully repay) the defaults, and CO, having your CR marked accordingly ( with cert of satisfaction from the court re the CCJ/CO) - as although the association will still be there, and the bank debt isn't strictly yours to pay if not on a joint account, the debts being satisfied will provide a more positive spin on them and your association.

I would then put some clear daylight between the events and your time of mge application, keep your credit record pristine, build as large a deposit as possible - and for the best chance of success first time round, go to a good adverse broker, when I would suggest, there is at least a clear yr between your app and the satisfaction of the adverse.

I realise that this will mean you going into rented to enable you to repay the CO & other adverse, and whilst you sit it out for 12 mths or so, but its the only way I can see to address this in the shortterm. (unless the banks debt is a default and you want the 6 yrs for it to drop off your record with CRAs) - and even then you still have the adverse charging order to explain.

I realise that you won't want to go into rented, but its something to maybe consider to reach your end goal.

Hope this helps

Holly x

Dave_Ham

Whilst I usually agree implicitly with Holly's views, I do not necessarily agree with all here.

If the loans and overdraft were in sole name, albeit charging order was placed and everything will be settled upon redemption (with no claims from ex over and above the numbers calculating) whilst I agree it will be tough, I think there would be options of buying immediately given the circumstances.

Obviously this is far from ideal, but given the situation and assuming that everything is repaid I think there are potentially Building Socities who would look at this - subject to further information obviously...

holly_hobby

Sure Dave,

But I'm looking at it from an UWs point of view, and how in my experience they have negatively viewed cases involving Spouse's and defaulted credit (single or joint) - as they assume that Spouses' divulge and share such events between each other, so if one's defaulting the other will know, and apparently didn't or couldn't afford to do anything about it. Indeed thats one of the reasons why CRAs show financial assocation notes, and why they can have an impact on finanical apps. (of course association notes aren't restricted to married couples, but anyone financially linked).

However, my comments are based on UW criteria from a little while ago, so it may be that current UW procedures no longer take account of the financial association between Spouses'.

As I say, if the marriage had already broken down and she wan't privvy to the activity/escalation of debts, that would go a great way to remove her from the events, and dappen the association whilst the financial acitvities were going on.

I would love to be proved wrong in this case, and hope that the OP with a decent broker will be able to get the app through without issue. (notwithstanding the income issues discussed).

Holly x

Dave_Ham

holly_hobby wrote: »

Sure Dave,

But I'm looking at it from an UWs point of view, and how in my experience they have negatively viewed cases involving Spouse's and defaulted credit (single or joint) - as they assume that Spouses' divulge and share such events between each other, so if one's defaulting the other will know, and apparently didn't or couldn't afford to do anything about it. Indeed thats one of the reasons why CRAs show financial assocation notes, and why they can have an impact on finanical apps. (of course association notes aren't restricted to married couples, but anyone financially linked).

As I say, if the marriage had already broken down and she wan't privvy to the activity/escalation of debts, that would go a way to remove her from the events and dappen the association whilst the financial acitvities were going on.

I would love to be proved wrong though, and hope the OP with a decent broker will be able to get the app through. (notwithstanding the income issues discussed).

Holly x

Agreed - although not all lenders enforce this, it does depend on knowing the lenders..

I would get this through, other things being equal...

I take your point though...

mac2lrk

Hi
Thanks for all your responses, I knew it was going to be tough, the CO on the property was only awarded because my ex-husband was working abroad, (he is a merchant seaman) and even though he provided the Court with the details, backed up by his companies management confirming he would be in the middle of the Atlantic for a month, the Court refused to postpone, the Judge said to him on the second hearing that although he accepted the divorce as a factor, he was granting the CO because ex had missed the first hearing, regardless of circumstances preventing him being there. So unlucky there. I have kept my credit reports up to date, with comments about each entry etc.