Is property developing possible with bad credit rating?

Shinedog12

GMS wrote: »

Its up to you what you do. Either you take what is available and swallow the rate or wait until such time as your credit file is better.

Property development is difficult and needs access to all avenues of finance. Homes Under the Hammer et al do not show the background to financing and issues arising.

Are you back to work following redundancy? If so for how long? Many lenders would want to see a minimum period of employment.

If you intend to refurb and sell then look at fees to repay early. Look at overall financing costs. Bridging finance could be an option but would be much more expensive than a 'high rate' mortgage.

Not something to dive in to.

Yes, my husband found employment straight after redundancy from the army, but it's only been 6 months. We can't stay in our accommodation for much longer either, and as renting locally is so high, we figured our best bet would be to buy something that is under the going rate, in need of refurb, sell it on, in the hope that we could gradually build up our deposit.

Thanks for the advice, I'm starting to think that we may have to rent for the time being, and get some stability.

ACG

Speak to a broker - one who is going to give you an indication of whats available. Theres no point in giving up until you know exactly what is available otherwise your going off someone saying ridiculous - and that will have different meanings from one person to the next.

WellKnownSid

GMS wrote: »

Property development is difficult and needs access to all avenues of finance. Homes Under the Hammer et al do not show the background to financing and issues arising.

Programmes like that certainly imply there's plenty of easy money to make, but also seem to avoid the obvious problems at resale...

Like the six month rule. And the fact that valuations may not follow in the footsteps of the estate agent's delight - especially if the renovations make the property a 'new build'.

Brock_and_Roll

Shinedog12 wrote: »

Yes, my husband found employment straight after redundancy from the army, but it's only been 6 months. We can't stay in our accommodation for much longer either, and as renting locally is so high, we figured our best bet would be to buy something that is under the going rate, in need of refurb, sell it on, in the hope that we could gradually build up our deposit.

Thanks for the advice, I'm starting to think that we may have to rent for the time being, and get some stability.

Very few properties are ever "under the going rate" despite the impression you might get watching property !!!!!!. The market works pretty well and there are many developers all looking for "cheap" properties" so margins are rarely great all in. Properties that appear relatively cheap, are cheap for a reason - they need money spent on them to bring them up to condition.

That said, you do have the advantage that you are going to live in the property - so you can take your time, keep costs to a minimum, pay no CGT, and in the event that the end result gives no profit, you can still carry on living in a much improved house.

Dave_Ham

Forget quick turnarounds and property development for now, although I may be a tad more optimistic than others on sensible rates for now.

What does £40k equate to in terms of a deposit, so what sort of house prices are you aiming at?

Get your Experian, Equifax and Call Credit reports to an experienced broker and see what the solutions look like.

Good luck

Shinedog12

Dave_Ham wrote: »

Forget quick turnarounds and property development for now, although I may be a tad more optimistic than others on sensible rates for now.

What does £40k equate to in terms of a deposit, so what sort of house prices are you aiming at?

Get your Experian, Equifax and Call Credit reports to an experienced broker and see what the solutions look like.

Good luck

Thank you.

With £40k as a 30% deposit we'd be looking at something around the £130k mark. Trouble is that a very basic 3 bed around here and within a 20mile radius is approx £180k!

With the credit report companies I know you can add a 'notice of correction' to your file. Do lenders actually take this into account when searching your file?

Dave_Ham

Shinedog12 wrote: »

Thank you.

With £40k as a 30% deposit we'd be looking at something around the £130k mark. Trouble is that a very basic 3 bed around here and within a 20mile radius is approx £180k!

With the credit report companies I know you can add a 'notice of correction' to your file. Do lenders actually take this into account when searching your file?

Nope, not in reality.

What is showing on your credit file, any defaults still left on; dates and value??

Depending upon the above, I would think you can get away with a smaller % deposit and therefore a larger purchase (subject to affordability and other variables)

ACG

Not really.

When i worked for RBS we would see them but just ignore them completely. If we wanted an explanation for something we would ask for it separately. It might not be the case with all lenders but i think in the main that will be the case - especially the larger lenders.

If its wrong get it removed, if its correct you just have to work with it and find a lender who accepts that its there.

Shinedog12

Dave_Ham wrote: »

Nope, not in reality.

What is showing on your credit file, any defaults still left on; dates and value??

Depending upon the above, I would think you can get away with a smaller % deposit and therefore a larger purchase (subject to affordability and other variables)

Between us we have 6 defaults, most recent is just over 2 years ago (march 2011) for £2500. The rest were between 2008 and 2011. On my file I have 2 defaults which actually correspond to the same debt, due to it being sold to a collection agency(hence the NOC)! That one is for about £2800.

Smaller % would certainly help!

Dave_Ham

From the information provided, I would fancy 15% deposit having legs although would be very confident at 20%

It is imperative you get all 3 credit files though, as many lenders use a combination and the dates, values etc. are critical.

The experience of any broker is likely to be the key determinant of rate achieved.

All the best, interested how you get on...