CCJ and Bad Credit Mortgage Potential?

HestonChops

Hi,

My husband has been subject to bad credit over the last few years, namely a CCJ for £1,800 which was "Satisfied" 12 months ago - 3 months after being issued; a dental fine for £150 which he is paying off in monthly installments and a recent £80 fine for something else, which has been paid in full. These debts are all under control but I am aware they will have adversely affect his credit score.

We have a deposit of £18,000 to put down on our next house purchase. A flat which we rent out and was valued as being in negative equity a couple of years ago - so unless we can part exchange it, we don't intend to sell it.

We are tempted by the Home to Buy scheme (not necessarily for a new build) but would that scheme accept us with a recent (ish) CCJ?

And generally, what would our chances be of getting a mortgage? Should we even attempt to or wait for a few more years for the CCJ to age?
What kind of mortgage interest would we be looking at?

I don't think we could get more than about £170,000.
I earn just under £20,000 and my husband earns £28,000 per annum.

Thank you

macfanuk

Going from the tonnes of research I've done whilst looking into buying our next house, you would firstly, be best going to a whole of market Mortgage Broker (not an EA one), with copies of both of your credit reports, and let them take a look.

Generally speaking, you can usually achieve 4 x gross annual income, however, to get past the negatives in your husbands credit report, I would suspect you'd need more than a 10% deposit.

I also believe that the Help to Buy scheme seems to be for people with squeeky clean credit history.

Dave_Ham

You have some incredibly big hurdles to get over here, as recent nature of the CCJ and another property in the background to not mix well with lenders.

You are unlikely to be working on standard income multiples and therefore £170k is likely to be a stretch to far.

You will be inelligible for most schemes, unless you look in your sole name although this is subject to a truck load of variables also

Sorry not better news, may want to consider renting for a while as time is a healer on credit files.

All the best

mollyjester

Just to add to what others have said - Help to buy is a scheme that holds joint firsts in regard to the charge on the property so its a risk for both the government and the lender. Usually the lend would hold first charge solely and things like a secured loan would be a second charge. For this reason they want clean credit ratings. I would say its a no on that front.

In regard to other mortgages my gut instinct would be to wait. Perhaps the CCJ in isolation would be OK but with the other stuff its not great. If you had any chance I would guess nothing over 75% loan to value as this lessens the risk. If you are the main earner this may also be a positive. The buy to let would be a concern for me especially if its in negative equity so a part ex maybe a good idea. Just to note most developers aren't offering part ex unless the roof is on the build.

plumfin

My circumstances are similar - husband has a default from June 2011, my payments are patchy up to Feb last year. My earnings are £35k, husband's £15K, so again very like yours, with outstanding debt of£12000.

My broker advised Kensington, who approved us for up to £160K mortgage, with 15% deposit. They also add the fees to the mortgage. The rate is quite high, 4.74% fixed for 2 years, but I felt this was a price worth paying to get back on the ladder.

I asked about new builds, but they only use the prime lenders and we don't fit the criteria, so that was a no go.

I accept we only have a DIP, but my broker assures me that Kensington don't change their minds (crossed fingers!). Might be worth a punt? Good luck, hope you get it sorted.

Yorkie1

I may be wrong but don't some of the HTB schemes require you to only own 1 house - i.e. not available to purchase second houses?

leveller2911

Yorkie1 wrote: »

I may be wrong but don't some of the HTB schemes require you to only own 1 house - i.e. not available to purchase second houses?

I think you may be correct and there was a thread a while ago about a loophole so there will be people putting their existing house in their spouses/childrens name dependant on mortgage etc which leaves them free to abuse the scheme.

HestonChops

Thank you. All of what you have mentioned pretty much backs up my suspicions. Its always good to get other views.
Thanks again

Dave_Ham

Kensington will not accept any CCJ's issued within the last 2 years.

Furthermore Plumfin, Kensington are being incredibly tough on underwriting currenty so you are not home and dry yet. I am not trying to worry you just set realistic expectations.

Your last 3 months statements will be underwritten and if currently a tenant, then a 2 years rental reference is requested and given your timescales of issues you may want to double check this.

All the best both