Part ownership/sub-prime Mortgage lender help please

doughy1822

Hi

I am trying to find mortgage companies that I can at least apply to. This is my story:

I currently own a 50% share of a house valued £180k. My exisiting mortgage balance is £20k, so I have approx. £60-70k equity. The other half is owned by a Housing Association.

I have two defaults on my credit file. Two joint Barclay's bank accounts (with ex partner) for £1,000 and £800 that my ex was supposed to pay off. If need be, I am in a position where I could pay these off.

I earn £30k p/a, have worked in this job for 9+ years and it's a permanent contract.

I would like to buy the other 50% share of my house (£70k ish) and spend £40k on improvements (Conservatory, drive, loft conversion etc).

In summary the house would be worth approx. £200k, with a £130k mortgage and £70k equity.

My local mortgage adviser told me this:

"you won't get a mortgage with defaults - pay them off and come back in two years"

I got some advice from a company recommended here and was told a bit more; "pay off your defaults and come back in two years + even though you are buying the rest of the house it's still classed as a part ownership mortgage so there aren't many lenders that you can go with"

Is this information correct? It seems odd that I can't get a standard mortgage to buy my house outright.

The advice on here says that there are sub-prime lenders that would offer mortgages with poor credit history.

I don't mind going sub-prime as I would remortgage in 2 to 3 years when the "high-street" lenders will be happy with my credit file.

Any advice or suggestions would be very gratefully received.

Thank you.

Dave_Ham

Key question is when were the defaults listed originally on your Experian/Equifax/Call Credit files?

The information you have received is not wholly accurate so far..

doughy1822

I forgot that bit, sorry.

I need to check but the accounts went default approx. 18 months ago.

My ex pays them small monthly payments through a debt management plan with Payplan.

For what it's worth the DMP was put in to effect straight-away so they was no period of time where they weren't receiving a repayment of some type.

Dave_Ham

18 months and all being well, there could/should be a solution based upon the absolute detail.

2 years from registration date will widen the pool further.

Paying them off will be underwriter discretion, as it would appear they are on your credit files (although worth checking for completeness) although someone else is paying (ex I think you said) and with Payplan assuming this joint debt is part of a wider single debt issue with other creditors forming the Debt Management Plan.

doughy1822

Full details as follows:

Default date: 28/08/2012
Default amount: £949
Monthly payment: £4

Default date: 29/08/2012
Default amount: £1276
Monthly payment: £8

These are the only two bad things on my credit file.

Ex is paying as part of debt management plan including other debts not association with me.

Originally I had hope to say to a lender that I would pay these off with the re-mortgage proceeds and obviously would.

However, I could pay them off now (put them on credit card) if there it is viable that I could remortgage in the near future and pay off the credit card.

Do you need any more details?

Dave_Ham

I think this is achievable, subject to the absolute detail.

Rates will invariably be higher, although not stupidly so.

You may want to request your broker looking at what the options there will be now and what they will be after August, when the defaults are 2 years since registration.

This may lead to you waiting a month to apply.

Additionally, if there is anything unusual like your Ex is still living with you this will make things much more difficult.

doughy1822

Happy to wait a month if it helps.

Can you recommend a broker please? Would you be willing to help?

I just read Martin's advice about asking if you are "whole market" and if you charge a fee or not.

Dave_Ham

Most brokers can operate on a whole of market basis, but almost all brokers will charge a fee in this circumstances.

I would imagine any fee free or lower fee brokers will just tell you if is not possible.

Before you do anything with brokers, you really need at least your Experian and Equifax report and ideally Call Credit also.

No experienced broker would want to attack anything until the reports are achieved.