Mortgage and Adverse History

benham3160

Hi all,
I appreciate advice can only be tailored on account of many, many facts but I'm just after a broad response.

My wife and myself are looking to buy our first home (been privately renting for around three years), my wife has a faultless credit file. We have outstanding credit cards between us of around £2,000 (which we have not been using, and paying about £200 pm to clear over the last year), one 'typical' car on finance at £180pm and we've actively been saving around £500pm for the last two years, we'd have a deposit today in the region of £15,000.

My creditfile, not so spotless;
1x CCJ (this will be removed 15/07/2014 - so I guess this doesn't have a bearing realistically)
2x Defaults, one will become statue barred in November 2014 (six years since date of issue, RBS credit card for £170) and one for £80 I incurred as a student in 2009 for a mobile phone bill, this was satisfied in January 2012.
A 'few' late payments, however none in the last four years.

We have a combined gross income of £50k and would be looking at property values around £150,000.

I've been told not to bother approaching any mainstream lender for the next few years with my history (even without the CCJ); would this still expected to be the case, surely there are people with mortgages who don't have a blemish free history? The remaining defaults are now quite aged, and have a total of less than £250. History has been spotless since 2010.

Given this, would we be advised to sit on our hands and keep saving, or would be worth applying to a major lender in the coming months to 'see what happens'.

As ever, thank you for the worthy advice in advance!

Andy

ACG

The defaults are quite old which is in your favour, as is the fact you have saved your deposit (not a gift).

Incomes are good and certainly not stretching yourselves by any means.

I would be relatively confident there would be a couple of high street lenders who would look to accept you. There would also be a few non high street lenders with rates in the region of 5% who would most likely accept you also.

So you certainly have a few options.

I would suggest using a broker just to ensure you are avoiding the fussier lenders.

benham3160

ACG wrote: »

The defaults are quite old which is in your favour, as is the fact you have saved your deposit (not a gift).

Incomes are good and certainly not stretching yourselves by any means.

I would be relatively confident there would be a couple of high street lenders who would look to accept you. There would also be a few non high street lenders with rates in the region of 5% who would most likely accept you also.

So you certainly have a few options.

I would suggest using a broker just to ensure you are avoiding the fussier lenders.

Thank you very much for your help.


One very large and famous building society we did approach (the one that is all over the Nation) were quite rude when we spoke to them in a cursory manner a few months back - we were told point blank 'We would not be interested in you for at least ten years' by their 'friendly' mortgage advisor, I didn't even get to finish my mug of coffee they'd offered me before being ejected.

A part of our deposit was a gift, but we can demonstrate that we've saved a very large part of it, and are continuing to save toward it.

Would you suggest waiting until the 11/2008 default has been removed or to go ahead and start the ball rolling now? Irritatingly (and I'm sure you hear this most regularly) we pay £700pcm rent, plus save a minimum of £500pcm toward a deposit, plus a large payment made to our cards... Yet, we're told we're high risk and shouldn't be touched!

Thanks, again for your most kind help!

Okydoky25

Cant see a prob if you leave it until after Nov. We just bought in just my husbands name. Similar salary. Same house value. Only in job just recently and with 2 dependants. 10% gifted deposit!

Edit: pay cards off now with money you are saving and use the money you would have spent on paying those as extra to save each month.

ACG

Funny as that sounds like 1 of the 2-3 I had in mind when replying.

Im assuming they had more info to go off than I do. Either way, I would be very very surprised if you could not get a mortgage.

benham3160

ACG wrote: »

Funny as that sounds like 1 of the 2-3 I had in mind when replying.

Im assuming they had more info to go off than I do. Either way, I would be very very surprised if you could not get a mortgage.

Probably less information than I've put on here, I went in and was dead honest with them at the very start, they pretty much stopped there....
...There was however a follow-up call made to my wife, asking if she'd like to come back and apply solely in her own name, of course at an inflated rate as they'd be having to stretch the income calcs....

This has given us both something to think about, and makes me curse the younger me for not paying his bills!

Thrugelmir

Why not clear your credit cards immediately?

You are on the right track. So keep saving and you'll get there soon enough.

ACG

Why would you have to pay more because of higher income multiples? The only reason you pay more is for higher LTV.

Speak to a broker, ignore the natiownide rep. I submitted an application to nationwide for someone in a DMP (this is not me recommending natiownide btw, their circumstances and LTV were different)... my BDM said its not one for them. Another broker told me it will be fine. It went through! So another broker knew natiownides criteria better than my account manager.

So as I said, speak to a broker. I would be pretty confident of getting this through at normal rates. If not then your still only looking at around 5% which isnt too bad.

hoops77

I'm in the same position mate, we have a£160k deposit and only need £115k mortgage.
We are trying our current lender halifax as we have good relationship never missed a payment in 8 years.
We're be reducing are mortgage by 70k
If that fails are sell and wait a year until my credit file improves.
Precise,kensington,Magellan and all the rest of the sub prime market are simply vultures IMO charging 5% +
Try aldermore if that fails wait a year and try again

leveller2911

melhuish77 wrote: »

I'm in the same position mate, we have a£160k
deposit and only need £115k mortgage.


We are trying our current lender halifax as we have good relationship never
missed a payment in 8 years.


We're be reducing are mortgage by 70k


If that fails are sell and wait a year until my credit file improves.


Precise,kensington,Magellan and all the rest of the sub prime market
are simply vultures IMO charging 5% +


Try aldermore if that fails wait a year and try again

What makes you think that?.. If they charge 5% then thats close to the historical average mortgage rate of the mainstream lenders. They will also set their rate to the risk of lending to people with poor credit..

hoops77

leveller2911 wrote: »

What makes you think that?.. If they charge 5% then thats close to the historical average mortgage rate of the mainstream lenders. They will also set their rate to the risk of lending to people with poor credit..

Because it's 5.4 rising every time the bae rise the base.
So if you get 3.0 from the high street fixed.