Morgage advice needed - bad credit but need to move

kay_1

Hi all

Me and my husband have owned our house for 7 years and are looking to move as we don't live in a nice area and now we have a child. We will have about £14,000 equity in our house and have savings of £10,000. The houses in the area we are looking at are approximately £240,000 so we should have a 10% deposit.

My husband's credit score is excellent and mine is fair. I got into some debt about 4 years ago so have some defaults which are all under the sum of £500 and have all been satisfied. I also have a CCJ for a college course which was cancelled so I did not finish paying. This is for £200 and again is satisfied. I have no outstanding debt left apart from a default from Welcome Finance for over 4 grand - god knows how as I only borrowed £1000! This is due to drop off in May as it would have been 6 years since the default so I'm not too concerned about that.

Do you think we're going to have real issues getting a mortgage? We both earn a decent salary so wouldn't mind too much having a higher interest mortgage.

We're planning on seeing a mortgage advisor after May when my Welcome finance default has dropped off. We ideally need to move by next January as this is when my child will be starting pre-school.

Sorry if its all a bit long winded. I would be grateful for any advice.

Thank you

kay_1

Oh and I've had no missed payments for over a year.

kingstreet

How many defaults, for how much and when were they registered?

The court judgment was registered when?

The equity/savings you have are going to be eroded by selling/buying costs of at least £6k;-

EA - 1% + VAT as an absolute minimum
SD - 1% £2,400
Legal costs and fees - £2k for a sale and purchase
Valuation and survey - £600.

The credit problems are going to make a 90% mortgage very difficult and the pressure on your deposit is making 10% look a lot, unless you can find extra to cove the fees.

kay_1

7 defaults registered in 2008/2009 - all under £500. Most being under £200.

CCJ was registered in 2011 - £200

All debts satisfied.

Yes we can raise the fees separately so the deposit will not be touched.

kingstreet

It's pretty much confirmed what I thought.

I'd say your chances at 90% are very slim, if not none.

Stick all three credit files in front of a broker and see what their opinion is. Do not agree to any upfront fee payments. Pay the broker only on completion. That way, their incentive is to get the case through, not just to submit an application.

kay_1

Ok thanks. I guess we'll just keep saving and see where we get.

Dave_Ham

Kingstreet is correct.

You either need to consider buying in just your Husbands name (subject to income of course)

or alternatively the world changes with a 15% deposit...

Good luck

Thrugelmir

kay_1 wrote: »

Ok thanks. I guess we'll just keep saving and see where we get.

Pay down the mortgage if interest rates are higher on the mortgage than on your savings.