Looking for first mortgage "Poor Credit"

at1991

Hello All,

I am looking into getting a mortgage for the property where my parents currently live. I am renting somewhere and if all is well, my parents will be living in the house with me.

I am looking to buy their house at around £50,000 which is less than the house value and I have a 10% deposit to put down on the property. My annual income before tax is £25,650 and I have 2 credit cards and store card where balances add up to no more than 5k.

I have spoken to a Mortgage Broker who advised that many lenders will not look at giving Mortgages to people when the equity has been gifted as my parents offered for me to pay less than the house value, they are getting older now and my dad was recently out of work due to redundancy so it is convenient and easier for all of us.

The issue here is that I have always seemed to have issues with my credit score, I have a "poor" rating, however, I have never missed payments or defaulted etc. It is solely down to the credit I have had and the way my credit history has been built up. On Equifax however, my score is usually within the "Good" or "Excellent" brackets. How much does a poor score affect the outcome of the mortgage and how much does equity and deposit play in the process? I know my score on paper looks poor, but I have handled my finances well for a very long time and probably share similar ratings to people who have missed payments regularly or defaulted, is the reason behind the poor score looked at or is it just a "poor is poor" kind of thing.

Thanks in advance to everyone, this is my first post but I am a regular reader and look forward to your replies.

A

ACG

Forget the score, its not a major issue.
Also having a parent gift you some/all of the deposit is not an issue.

Find another broker, im sure there will be options here.

at1991

Also, I have tried to apply for a credit card in the past and was declined. I know this affects the rating also, but unsure of to what extent this would be looked at for a mortgage application. i.e. looking for a mortgage surely shouldn't be considered as being "credit hungry" as it is for a specific purpose of buying a house and that's it. Credit cards and loans can be used for multiple reasons and I have a history of paying rent, which is more than many mortgages I have found per month so I can prove that I am able to cope with this.

at1991

Thanks for the quick reply. I thought the same about the broker as I have a friend who had their parents gift some deposit and gave the house at a lower price and they went through Natwest and got approved.

Foxy-Stoat_3

I think the declined credit card is the least of your worries trying to secure this mortgage.

I wish you all the luck.

amnblog

The main problem here will be wanting your parents to stay in the property with you after selling it to you at below market value.


You need to engage a good mortgage broker before you do anything else.