Mortgage, following DMP

bananah

Hi,
Please bear with me on this one - lots to get through!

My wife and I came out of a DMP almost 2 years ago. We sold our house to clear off any existing debts, and went into rented accommodation. We now have no debts, but both have a poor credit rating.

I am a director of a company. Between us, my wife and I have 38% of the shares (19% each).

We take home (between us) around £6300 per month, made up of basic salary (around £850 each) and dividends of £2300 each. Our outgoings each month are around £2700 including £1275 in rent.

We are saving as much as we can for a deposit. However, my in-laws are about to sell their house and move down to our area. So we are looking into getting a larger house together (we have 3 kids), either to split the property, or potentially build on the land of an existing property.

The problem is, we cannot seem to get a mortgage offer. I supplied all details recently to an advisor, including company accounts etc etc. Whilst its a company I joint own, I have only been a director in the last year (I resigned as a director before over concerns about my credit rating having an impact on the company).

We believe that my in-laws may be able to put down a deposit around £200k, and we would then pick up the mortgage. Given our income and the fact we have no debts at all, I would have thought that we should be able to secure mortgage.

I do understand that they will have to look at the business accounts etc, but does anyone know of an advisor that might be able to help?

Many thanks

ACG

Just to summarise, could you put:

Purchase price (approx):
Deposit (approx):
Date you finished your DMP:

Could you also confirm whether you would be buying with your partner or partner and in laws?

Also what date did you become a director again:

GMS

In laws providing the deposit, residing in the property and presumably not being party to the mortgage will be an issue.

bananah

In response to your queries:

Purchase price (approx): 500k
Deposit (approx): 200k
Date you finished your DMP: 30/4/12

Could you also confirm whether you would be buying with your partner or partner and in laws? partner and in-laws I think

Also what date did you become a director again: 20/3/13

bananah

Could they not 'gift' us the deposit, so we effectively pay it?

ACG

gifting the deposit and living in the property is where the problem will arise. Its effectively a gift with conditions attached to it and lenders do not like it.

I think this is far too complicated to discuss on an open forum. I think you need to get your paperwork together (contracts/accounts/payslips/credit reports) and sit down with a broker.

It may be achievable, it may not be. But there is a lot that would need to be looked into.

amnblog

from the posts it looks like one broker has already struggled to find a solution. The only option Bananah has is a second opinion from another broker.

As ACG says, there are numerous 'curve balls' here.

Thrugelmir

Lenders will wonder why no savings. If there's £3,600 of "spare cash" every month.