Mortgage and Adverse History

leveller2911

melhuish77 wrote: »

Because it's 5.4 rising every time the bae rise
the base.


So if you get 3.0 from the high street fixed.

I don't think you quite understand how it works.

All lenders link their lending rates to the B of E base rate. So for instance when base rate was say 10-12% lenders were charging 15% on their standard variable rates. When it costs banks more to borrow money (Bof E base rate rise) to then lend to you do you think they shouldn't pass on the cost to you?..

Look at it another way. If you were a bank and 2 people came to you wanting a mortgage. The first person had a perfect credit history and wanted to borrow £100k and the 2nd person wanted to borrow £100k but had very poor credit history would you lend to them both at the same interest rate? Knowing that the 2nd person had a history of late payments or not paying back their debts at all.

Would you lend to them both and if so would you give them the same interest rate? knowing that one of them may well not pay you back.

Banks have to factor in the risk that someone with poor credit rating may not pay back their debts.

hoops77

leveller2911 wrote: »

I don't think you quite understand how it works.

All lenders link their lending rates to the B of E base rate. So for instance when base rate was say 10-12% lenders were charging 15% on their standard variable rates. When it costs banks more to borrow money (Bof E base rate rise) to then lend to you do you think they shouldn't pass on the cost to you?..

Look at it another way. If you were a bank and 2 people came to you wanting a mortgage. The first person had a perfect credit history and wanted to borrow £100k and the 2nd person wanted to borrow £100k but had very poor credit history would you lend to them both at the same interest rate? Knowing that the 2nd person had a history of late payments or not paying back their debts at all.

Would you lend to them both and if so would you give them the same interest rate? knowing that one of them may well not pay you back.

Banks have to factor in the risk that someone with poor credit rating may not pay back their debts.

If I was a bank and someone had 160k deposit on a £275k property with a poor credit rating but has had never missed a payment on there mortgage in 8 years and has made regular over payments I'd have no problem giving them a mortgage as I would use common sense.
Unfortnaly it doesn't work like that does it

leveller2911

melhuish77 wrote: »

If I was a bank and someone had 160k deposit on a
£275k property with a poor credit rating but has had never missed a payment on
there mortgage in 8 years and has made regular over payments I'd have no problem
giving them a mortgage as I would use common sense.


Unfortnaly it doesn't work like that does it

I'm not a mortgage advisor and I posted my opinion on why sub prime lenders interest rates are higher than mainstream lending rates.

I know nothing of your personal circumstances but If I were a lender then I wouldn't just be looking at your deposit I would be looking at your use of credit,income,expenditure (Affordability) so various lenders may see something that they don't like and hence will offset the risk that you may pose.

All said and doen the market will decide if and when they will lend to you and at what interest rate. Your notion of "common sense" may differ from everyone elses. A bank won't want to be left trying to sell a £275k house in 3 years time that may well be worth a lot less after having repo'd due to you not paying the mortgage. They want to be confident you will pay the money back.

Have you posted a thread on here and if so what do the mortgage advisors on here say?.

tomtontom

melhuish77 wrote: »

If I was a bank and someone had 160k deposit on a £275k property with a poor credit rating but has had never missed a payment on there mortgage in 8 years and has made regular over payments I'd have no problem giving them a mortgage as I would use common sense.
Unfortnaly it doesn't work like that does it

With a history of defaults any lender will quite rightly question whether they will be the next one you fail to pay. Your whole credit history will affect the rate you are offered.

hoops77

tomtontom wrote: »

With a history of defaults any lender will quite rightly question whether they will be the next one you fail to pay. Your whole credit history will affect the rate you are offered.

Hoping for the best if I'm honest if we get declined, gonna sell the house anyway,pay are commitments off, put 150k in the bank, we can rent our house back for a year.
By this stage there will only be 1 default on our credit file for £300 which is settled.
Hopefully a good broker can help at that stage?

GMS

You have an impaired credit history so will not have access to the pick of the market.


If a lender advanced funds based on their ability to repossess and sell then they would be on a very sticky wicket in the event of any default. Deposits don't pay the mortgage.


Calling lenders vultures for charging higher rates for higher risk customers is very naive. How can you expect to pay the same rate as a squeaky clean customer when you have demonstrated poor financial management?


The concern should be getting a mortgage, not questioning the rates.


Of the lenders mentioned only Magellan are 'excessive' rates. They also require an event to detail why there was credit problems.


People with poor driving records pay more for insurance due to the risk. This seems to be accepted but when a lender prices for risk they are vultures?

hoops77

It's all about opinion,
My point is we are surly less of a risk with all creditors paid, money in the bank , a mortgage that we have served for 8 years cut by 70k with a 40% ltv and over shorter period off time.
In just 2 years we're owe under 100k on a 275k house
As I said I'm hoping we can port this mortgage

ACG

melhuish77 wrote: »

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

Rubbish!

This is why you should not believe what you read on the internet.

Precise have many rates sub 5%, kensington do not even have a rate above of 5% or above. As far as im aware its 4.75% which for an 85% mortgage and bad credit isnt too bad? Magellan are for people with significantly worse credit than the OP and so price their products on the risk they are taking on.

To the OP as I said, there I would be confident this can be done at high street rates. Get a broker, ignore the internet and you should be fine.

hoops77

ACG wrote: »

Rubbish!

This is why you should not believe what you read on the internet.

Precise have many rates sub 5%, kensington do not even have a rate above of 5% or above. As far as im aware its 4.75% which for an 85% mortgage and bad credit isnt too bad? Magellan are for people with significantly worse credit than the OP and so price their products on the risk they are taking on.

To the OP as I said, there I would be confident this can be done at high street rates. Get a broker, ignore the internet and you should be fine.

The internet sometimes can't be ignored, type in any of those three lenders and your find more negative than good.
Maybe vulture was the wrong word I apologise.

ACG

Type in the name of ANY lender or in fact ANY company and you will find more bad than good.

People feel the need to share bad experiences more than good.

BTW, you dont need to apologise. Everyone has their opinions, we dont always agree.