Should we partially settle BLS?

Nicecouple

Hi,

My wife and I currently have a sole mortgage in my name, as she has an imperfect credit history. I have a good credit history and we would like to have a joint mortgage.

I believe defaults/missed payments could potentially be overlooked by some lenders. I am not sure who they are though?

There is only one debt that is still outstanding. This is £8.5k owed to BLS/Lloyds TSB. My wife works part-time and so this is on a reduced payment plan at £90 a month (interest frozen). Would we be considered for a mortgage with this arrangement still in place?

We have been offered a settlement of £6.3k, which I am trying to negotiate down further. I am considering taking a loan in my name to clear this. This would mean LTSB and BLS would consider the account closed, although it would be partially settled on credit file. We are putting this in writing to them now.

Should we settle the BLS debt and when potentially could we have a joint mortgage if we did? Which lenders would consider this in ca. 6 months?

We could probably move to our desired location remaining on a sole mortgage, but would prefer not to.

Thanks
Richard

[Deleted User]

i dont see the need to change it to a joint mortgage unless im missing something?
i`d be concentrating on getting rid of her debts

fatbelly

I don't see a lot of advantage in this. You'd be borrowing at a commercial rate so say £6300 at 7.3% over 84 months, paying £90+ per month. Would a lender take this commitment into account if you applied for a mortgage?

If you just continue with your plan, you clear the debt interest free in 94 months.

75% is a pretty poor settlement deal.

Her credit history is not going to repair overnight whatever you do. By entering into a joint financial product your record would be linked to hers.

Nicecouple

Thanks for quick replies.

We are looking at moving house next year and my wife would like to be on this new mortgage. I think this is mainly as it will feel more like hers then (if that makes sense).

She feels like the financial mismanagement was a long time ago. I am awaiting a copy of her credit report to check the detail. BLS say her last default was Jan 12, but this makes no sense (there was possibly a missed payment as this was when she closed her account and was added to mine).

We have a joint bank account, which hasn't affected a car loan I took for £11500 about 9 months ago. Will this affect a mortgage? There is an overdraft on the account but we never use it.

I agree that BLS' offer needs improving. We have counter proposed £3100 and I am hoping they will accept 50%/£4200. Should we then settle? I would be taking a loan in my name, which may reduce the amount we can borrow on sole mortgage. The total repayable would be much reduced even with say 7% interest.

I guess you have answered my main question, as I wondered whether mortgage companies would overlook the defaults if they were all closed. I take it that the main banks won't?