Typical deposit needed for 'bad credit' mortgage.

LauraWxx

Hi all,

We are seeing a mortgage advisor on Thursday and getting the bf's experian reports tonight to take with us, however impatient me is looking for a bit of info prior to this -

In summary we are looking at buying a house for £180k, I have good credit history and the bf has bad but not terrible.


The bad credit is made up of arreas to his mortgage to the tune of £900, the payments had been missed around 2 years ago but in his infanant wisdom he decided not to pay them until I made him in December 12.
Seperate to the arreas, the mortgage payments have been made in full and on time for at least the last 18 months.

He had a loan from the bank that was settled in December.
He has a small credit card debt (circa £500 i think) which he has paid i think £10 a week regularly for a good couple of years (i know this is fruitless in terms of paying the balance off but I am picking my battles!).
He always pays his phone bill but up until December it was only when they cut him off, (he had the money buy just was useless as managing it :mad:)

Anyway, he doesn't think he has any ccj's or defaults (this is why we are getting his experian report tonight to confirm), however on the whole his credit rating is prob not the best as due to missed / late payments and the arreas.

I have essentially took over everything for him since December, and now everything is paid on direct debits and he is saving etc etc. The plan was to wait for about 2 years to allow some decent repair to be made to his credit file and build up his savings more - however now having seen this house we are wondering that combined with the fact i have a pretty decent credit rating and we (well I) have a sizeable deposit we may be able to secure a mortgage.

I was wondering if any of the mortgage advisor's on here could give general advise regarding what sort of % deposit we would need to put down to gain a mortgage under these circumstances.

Affordability will be no problem and going forward I am managing all the money and direct debits so there is no chance of any repeat offences on his part.

Also would my good credit sort of balance out his bad credit and put us somewhere in a middle ground?

Would be grateful for any advice or indications?

Thanks

Dave_Ham

Hi there,

It pretty much all depends upon how his Experian report looks and what has been recorded. It will also be worthwhile getting his Equifax and Call Credit files too, as not all lenders use the same reports.

Typically at 15% deposit, you can get away with a bit both adverse and missed payments but wholly depends upon the lender selection and the detail of your case.

Good luck

LauraWxx

Thank you Dave,

15% would be doo-able, fingers crossed!

Thrugelmir

LauraWxx wrote: »

The bad credit is made up of arreas to his mortgage to the tune of £900, the payments had been missed around 2 years ago but in his infanant wisdom he decided not to pay them until I made him in December 12.

Not the way to convince a bank to lend you thousands of pounds. You may need some more clean history to prove that the lesson has been learnt.

LauraWxx

Thrugelmir wrote: »

Not the way to convince a bank to lend you thousands of pounds. You may need some more clean history to prove that the lesson has been learnt.

I thought as much, just looking to try to figure out if there was any possibilities.

LauraWxx

Having gained the experian report last night, I am pretty sure I am flogging a dead horse now.

A default was registered as satisfied in Jan 2012 and as I thought there are late payments up to December 12.

Am I right in assuming the default albeit 14 months ago make this a no go?

Or is there a level of deposit that can be put in to combat such a recent default?

Dave_Ham

Not necessarily a dealbreaker, although you are likely to need a specialist.

15% deposit is now incredibly unlikely subject to the detail of all of the credit reports, potential solutions again at 20% deposit although these are not necessarily competitive/desirable rates.

Good luck

LauraWxx

Thank you for your advice, we are seeing a mortgage advisor tomorrow although not one specifically for 'bad credit' mortgages...maybe this is something we need to look at.

Thanks again

happycamel_2

Wow, given how he's lacked respect for companies that have lent him money or provided services in the past and the fact it's been you not him that's sorted it I'd be very wary about taking on a huge debt and tying your credit file to this person. Frankly, he doesn't sound mature enough for a relationship let alone a joint mortgage. What will you do if he doesn't pay his share or you split up?

Please, please get this all sorted out legally if you must purchase a house jointly with him. My advice would be for him to marry you first though, partly for the legal implications and partly because it demonstrates long term commitment formally and publicly.

Sorry to be a doom sayer, I've seen too many DFW threads from people who are left with huge debts by irresponsible partners.

Thrugelmir

LauraWxx wrote: »

Am I right in assuming the default albeit 14 months ago make this a no go?

Default is one of the issues. The other is the continuing late payment history. Both go hand in hand.

Too many people assume that bad news disappears with the "default". Late payment is in itself a "default" and will be scored as such.