Mortgage Advice for bad credit history

Ifty86

I am currently renting but I am paying £800 rent a month and I’m looking to buy. But before even considering that I need to know if I would be eligible for a mortgage. I am currently in a Debt management plan with debts of over £40k I try to enter an IVA in Jan 2007 but less than the required 75% of the creditors accepted it hence the DMP. My salary is £33,500 per year and I pay £350 a month to towards DMP. I have not used my credit cards for nearly 12months now as I am concentrating on clearing them. I was wondering if there are any special mortgages for people like me who have had default notices in the last 12 months.

Also do you think I could get 100% Mortgages or will I need o pay large deposit? Currently I don’t have any savings but could get help from parents for the stamp duty and legal fees etc. How much Mortgage could I get? I am a 26yr old male in Central London with professional Job (Auditing).

Thanks

mightymouse

Hi

What follows are just my thoughts and anything I put down should be thoroughly checked with an expert debt councillor.

I assume your single and the debts are a mishmash of your past few years and reality is here.

You are serious about your situation hence the try for an I.V.A resulting in debt management.

The rent stands for the moment but will change if you could buy somewhere.

The £4200 repayment per annum to your creditors equates to £21000 over 5 years (if say an I.V.A),

Thats not to say your creditors will let you off easily but if your mum and dad were to offer to help you might be able to negotiate a lump sum in full and final settlement to your creditors representing what they would get over 5 years and expect a bit less to end it now.

That would leave you then to concentrate on saving toward a deposit and eventually paying back mum and dad.

Get someone to work out what you might be expected to pay if you went bankrupt..Your not but but that would be the worst case scenario.

By the way there is no guarantee that you wil be free after 5 years without the I.V.A. to protect you.

herbiesjp

A 100% mortgage with a less than perfect credit history is very difficult - the bigger the deposit you have, the better.
Your job and income are good, but it really depends on what kind of purchase prices you would be happy looking at?

However with £40k on a DMP I would seriously question getting a mortgage

There will be options available to you, however it will depend greatly on whether you think it is the right move for you in your current situation

mightymouse

Hi again

A just a thought but is there any student loan amongst your debt?

blissfulbabe

Can I suggest you contact an IFA who specialises in bad credit?

I am on a DMP, with £37K of debt and have had default after default on my credit records. I earn £30K and my IFA managed to get me a £125K mortgage - but I did have a £15K deposit (thanks Mum & Dad!). My interest rate is 6.15%, which is not great, but by paying my mortgage I am rehabilitating my credit record and hope to remortgage in a few years time (depending on what the interest rates are at the time).

The thing is, without the knowledge and skills of my IFA I wouldn't have been able to find a mortgage I could afford and I have avoided paying fees of over £3K to an online mortgage broker who found me a mortgage with the same mortgage company - at an interest rate that was 1.27% higher than I am paying now!

A good IFA can save you thousands and should also be able to tell you whether what you want to do is a) realisitic and b) affordable.

Good luck.