Mortgage advice please?

kat246

Hi,
My partner and I are after a mortgage but I am putting things off as I am scared about my adverse credit. He has a score of 890 on experian whereas mine is more like 490 when I last checked in August as I have an unsatisfied CCJ of £500 (basically I knew nothing about it and so could not argue it at the time - only found out when I checked my credit status in June this year) from March 2008 and a couple of defaults from september 2007 and early 2008.

I have since been paying off a store card I took out end of last year to try and bolster my credit rating - more than the minimum payment every month and have been offered more credit on it as a result, and I have a £600 overdraft, which is set at £1700 but I have got down to £600 at the moment. I have been with my bank over 7 years and my partner and I have a joint account which we use to pay most of our bills. My partner was named on all the utility bill until recently, although the amount came out of the joint account and usually off my wage as he is self employed and so has a business account where his wage goes. I changed the bills over to my name in June and have been paying them from my own account, as I said, to try and improve my rating, and I have done this religiously.

The thing is, we really want a mortgage and have been given half of the house we live in as a gift, but need to pay the other person who owns the other half (uncle) so that it will be fully ours. Therefore we need 50% LTV. Would we be better off letting my partner be main applicant and would that make any difference to the likelihood of getting a mortgage, when we still need my wage as well to get enough to buy the rest of the house? Is there a lender that would be most likely to lend despite the adverse credit, based on the fact we have 50% equity?

Really hope someone can help, because we need to go for the mortgage ASAP as the Uncle wants to sell the house otherwise and get his share.

kat246

I meant to say, we are after a fixed rate for a couple of years at least (preferably) repayment mortgage, rather than interest only which surely makes us a safer bet than if we were just paying interest only?

Dave_Ham

For the time being, forget rates, repayment types etc. as you have to find a lender happy to lend first.

The fact your CCJ is unsatisfied makes it harder, but not impossible given the dates.

Some lenders will not like the nature of the gifted deposit, others will.

You have a good opportunity here, although you will need specialist help and good, specialist help at that..

Firstly, you need to obtain both of your Experian, Equifax and Call Credit reports. Just order the £2 variety and forget the fixation on the scores, they are irrelevant.

Once you have the reports, sit down with someone and give them the reports and all of your details.

Then let them do their job and see what agreements in principle they can achieve.

Pay no-one an upfront fee for this, unless it says in their terms that it is refundable if no solution is sourced.

All the best

kat246

Thanks Dave Ham for your reply.

When I said we got half the house as a gift, I mean that it has been signed over to us legally, so we just need to buy the other half. Does that not make a difference as it means we have fifty percent equity so the mortgage lender would get their money back should the worst come to the worst and we can't pay the payments if something bad happened?

Dave_Ham

Not really sure, as it depends on how it has been registered. This is achievable but you will need to go through all of the details with someone sensible and look at the solutions.

Assuming it is mortgage free and you being a joint owner, it would be a remortgage with a lot of equity and therefore low loan to value.

All the best

Thrugelmir

kat246 wrote: »

Does that not make a difference as it means we have fifty percent equity so the mortgage lender would get their money back should the worst come to the worst and we can't pay the payments if something bad happened?

This isn't the way lenders think. They profile you in order to determine that you are a good risk with a low probability of default. Mortgage lending is very low margin profit wise. Lenders have no need to take a risk. As demand for mortgage money exceeds supply.