Complicated situation with mortgage and bad credit rating...any help?

skilk

Hi All!

New to the site, have read plenty of threads and advice on things however this particular situation I have never come across before so was looking for some help.

Basically - me and my partner are looking to purchase a house together, however the main problem is that I have a poor credit rating - being younger and irresponsible (some of you have been there i'm sure) I am now seeing the repercussions of not paying my bills on time.

The bad credit comes from two defaults (neither settled) 4/5 years ago and a few missed payments here and there, although all in all i'm in about £800 worth of debt for the defaults, (I don't have much debt for someone that has such a poor credit rating!) however finding the money to save each month for this is a struggle...but i have started to face up to this and am trying to fix it.

The complicated part comes in now...I actually own my own property outright - my mum died when i was 18 so I was left to pay off the mortgage and sell the home we lived in etc, and buy a flat for myself which I did and have lived there for 6 years. At the time house prices were rising and rising (overnight it felt!) and I got caught in the pressure of buying before it got to the point where my money wouldn't stretch very far, and bought a flat that i wasn't particularly happy with (old flat, old kitchen&bathroom, walls literally crumbling!)

The will was not amended and was old, stating that I couldn't inherit assets until i turned 21, however the solicitors got around this by the flat being in their name, and it was to be signed over when i reached 21. Instead of keeping some money back they failed to mention the costs at the time and since looking into it more recently it is costing me just over 1k to get the house signed over into my name.:( I'm slowly in the process of paying this off so my name is on the land registry.

I have over the years done cheap diy jobs to improve where i can but am looking to move into a proper family home to settle down and have some children in the nearish future, with no damp (the damp proofing didn't really work!) and a spacious enough kitchen or workshop to expand into a business (cake decorating) and there is no way I can afford to make the improvements needed on just my wages. My problem is all my money is tied up in property.

After lengthy conversations with my partner, the plan was to sell my flat and that would leave us with about 50k for a deposit (about 25%), and then I would buy a studio flat in the area that i would rent out, that way I always have some investment and security i can call my own. If we were stretched and had to put more deposit down then it would just mean I'd have to consider buying possibly up north where house prices are lower.

Obviously alone i would not be accepted for a mortgage, however my partner has the perfect credit score (999 on Experian) and is on a much higher wage than myself.

Sorry about the essay above, now here are my questions

.Would it be possible for us to get a mortgage based on my partner having a great credit score and being the first person on the mortgage? I know that some companies did focus more on the higher earner but is that a thing of the past?
.Would settling my defaults make a big enough difference to my credit rating? I'm in a situation where I have saved enough to partially resettle one, however do you think it would be better to put that money towards the transfer of equity with my solicitors instead?
.Does already being a homeowner give me an advantage? Does it mean i'm considered less of a risk to a lender as if we weren't to pay i'd get my assets taken to retrieve costs?
.Would it be worth going with a 'bad credit' lender until my rating is better then look to remortgage?
.If none of the above sounds like a good idea then would you suggest my partner being on the mortgage solely first? I assume that would effect our borrowing amounts and could this incur hefty fees when down the line I was to be put onto the mortgage?

Any advice on what people would do in this situation please?! We are going to meet with a broker/fa when we both get a day off free together but I would like to be prepared and know our options. Ideally I would want to get a mortgage together with a 50k deposit, does anyone know whether my circumstances will mean we may be accepted?

Thanks in advance

ACG

I know you have wrote an essay there - and i have read it all, in comparison my reply is going to be pretty short....

25% deposit, the age of the defaults and the relatively small amount owed will all go in your favour. Based on what you have said, you should be able to get a mortgage.

I would suggest you get your credit reports and go and speak to a mortgage advisor. It could be a case of going to an "adverse" lender but it may not. Either way, the rates wont be shockingly bad, i would imagine under 5% should be possible without any major problems. Under 4% could also be a possiblity.

But you might not manage it without the help of a Mortgage Advisor.

Dave_Ham

You certainly have enough to go at given the adverse is historic and a fair deposit.

I would fancy arranging this on good rates given the details provided.

Do not let the broker credit score you until they have explained their lender selections/advice and why..

All the best

Thrugelmir

skilk wrote: »

The bad credit comes from two defaults (neither settled) 4/5 years ago

And you are expecting a bank to lend you more money?

You need to start with the history. As its going to bite you back when you least wish it to.

Annisele

Buying a house jointly with your partner sounds like a reasonable (and possible) plan - but I'm confused about the studio flat.

Do you mean that once you've sold your flat, you'll be able to buy a studio flat outright and then have £50k left over for a deposit on the house? If not, where is the money for the studio flat coming from?