mortgage after seperation with poor credit history

lazza1978

I will try to keep this brief but i really need some advice.

I have 2 ccjs from 5 years ago, one is settled, i also have a secured loan which is now unsecured which i am paying £10 per month for and will disappear from my file in April 2013 it shows on call credit and equifax, not experian. A mortgage account is settled, but again was in arrears for a while,

I have several smaller defaults, most of which are closed and settled but still showing on my file for a couple of years and i am in payment arrangements for all the recent ones which i will clear in the next 6-12 months.
I am up to date with rent and utilities, a vanquis visa card and my current accounts

The electoral roll is not showing with equifax and i have queried this. The council say its because my house has a name.

My husband announced last week he wanted to seperate, i have not done anything wrong and he has said he doesn't want me to have to live somewhere awful etc, i can stay as long as i want but I want to move out as soon as possible. The house we live in is tied to his job and we pay a small rent.

We got in this mess together when we were younger he had temporary jobs and we fell behind with things, i also didn't fully realise the consequences at the time, but stupidly most of it is in my name

I have seen a house, and my parents have said they will put up £40k towards it, my mum is retired and my dad retires in march, he has 2 other properties one with a mortgage and the house they live in is mortgage free.

They want to help anyway they can but cannot afford to buy the house outright.

The house is £80K so i need to get a mortgage for £40K i cannot afford to rent as the cheapest house is double what the repayments on a mortgage would be. I have been declined by a couple of building societies and am aware that repeated applications do more harm, what can i do?

Thanks in advance,

Southernman

What's your annual income?

lazza1978

sorry knew i would miss something off, its £17775 i have been with same employer for almost 12 years
i also get child benefit, 80 per 4 weeks

ACG

Shouldnt be a problem.
I think you will need a mortgage advisor for this but it will be possible i think. Especially if one of your credit reports are clear, all i would say is dont expect the best rates.

holly_hobby

Have I understood correctly ...



You currently have ...

• 2 CCJs both 5 yrs old (1 satisfied)
• Several further defaults both historical (arrears satisfied) and also more recent (for which you are currently in various repayment plans) - what are their dates of registration and amounts ?
• An additional loan on a £10 (reduced ?) repayment schedule (which disappears April 2013, so I presume this is another default ? Or if not when does it end ?)
• Plus historical (how long ago) mge arrears (how bad) ... ?

Whilst CCJs may be subsequently satisifed with a cert of discharge and satisfaction obtained from the courts (which I trust you have), Defaults are a different animal as such .... as they are the prequel of a CCJ and simply a record from the creditor of you defaulting on your credit agreement. So whilst you may subsequent to the registration of the default, settle the arrears, or even enter into a payment arrangment - defaults are not and can not be satisfied as such, as they are a notification to other creditors that you have previously defaulted on credit repayment terms, so as a result are "cast" as such - unless the creditor agrees to remove the default registration, or they were improperly registered, or until their 6th anniversary of registration occurs (following which they, and your CCjs, will disappear from your credit record - this is because adverse credit recording such as CCJs and Defaults are only published for a max period of 6 yrs after which they are classed as spent as such).

I have noted that you say, your (defaulted ?) £10pm loan only appears with one CRA - but I didn't read that at least one of the CRAs doesn't carry any of your adverse (ie is clean) .... or have I missed that ?

If you're not sure, check my file, is a free 30 day multi agency search engine, which will give you info from all 3 agencies used, Experian, Equifax and Call Credit - its quite comprehensive (ignore any "scores" provided) and is super easy to cancel on line - and the search engine I always recommend for a through one stop check. http://www.checkmyfile.com/

Based on the above, and amount of adverse, I do think you will really, really struggle to get anything in your name.

You mention parents are happy to furnish a deposit, but can't pch entirely for you, and that they have a property in addition to their primary residence.

Can I assume that the additional property is let ?

Could that be a temporary home for you, at least until your adverse disappears ? (by the way your Vanquis card will be invalueable in re-building your credit worthiness for future mge apps (when you are clean) ... so that was an excellent move in aiming to re-build your credit status, IF you don't let it spiral and you maintain it impecably of course ... which I'm sure you will x).

Alternatively,although happy to donate the 40k deposit to you, would your parents be happy to actually purchase the property in their name under a (regulated) BTL arrangement (an arrangement which won't involve your credit history, and may also avoid restricted term due to max age issues of parents if they sought a residential mge for you) - and which could be a solution. Albeit, there may be later CGT issues for parents, which need to be discussed as part of the exercise, and as point to note BTL fees are generally higher than residential ones - but it may be a solution, given the circs.

Although BTL mortgages are typically unregulated lending, in the case of buying and renting to family members, and under FSA regs, it is classsed as regulated lending. Which means that the fly may be that affordability is assessed as a 2nd residential mge (so their (post retirement) income will come into play), as oppossed to that of an ordinary BTL, which is typically based solely upon rental receipt at 125% of mge. (to which, if accepted, and being fair to mum & dad, in respect of "rental" you should essentially meet the monthly mge commitment. The process for parents reporting to HMRC can be discussed later, and if you wish to pursue the BTL avenue it would be advised to use a whole of market mge broker, for not only their expertise and guidance, but whom will have access to BTL products and lenders, that direct applicants don't).

Now of course the above arrangement may not suit for one or several reasons, but on the facts given, it may be an alternative to consider, if you are unable to secure your own residential mge as a result of your previous and still relevant bumpy credit issues.

Hope this helps ...

Holly x

Dave_Ham

As a backup if speed is important, your parents could buy the property for you as a buy to let.

Might not be ideal, but gives you options and time is a great healer on your credit files...