FTB, low credit score, Any ideas?

gibs83

Hi,

Wondering if anyone could help. We are looking to get a 95% mortgage, both first time buyers on a house that is £100k. We earn combined £50k PA. OH has only just started her job as was made redundant on Xmas day, although previous on the same salary and this current job is permanent. We used a broker at the estate agents and were recently been turned down for Halifax as they want 15% deposit and woolwich.

Checked our credit scores on Experian and both aren't too good.

I have a low score of 639. When I rang and asked why they have said it is because I have 10 credit checks on record from the past 12 months and 3 new credit accounts in the last 12 month which are not yet established accounts? These are the only accounts I have open, lots of previous settled accounts, one late payment of £5 in 2011, no missed payments and no defaults/CCJ's etc. I was a student until starting work in July last year which is why these credit accounts are recent. I have a graduate account with an overdraft I use every month.

OH has 824 score. No late/missed payments, one new credit account but this hasn't shown up yet (changed her car for a lower value car, settled old finance of £13k and took out new finance of £8k). 2 credit cards, no overdraft. She has a CCJ for £480 from Jan 2011, Settled Aug 2011 from water company which understandably affects hers although she is still higher than mine.

Does anyone know if there are any lenders who may consider us. I understand we are probably looking at sub prime lenders now, which would be fine if these weren't extortionate as we would hope to remortgage in 2 years when my credit rating should be normal and OH CCJ gone.

Sorry for the long post, just our broker hasn't been much help despite being positive that we could get something sorted initially. Thanks

kingstreet

An EA advisor will probably not have the time, the interest or the experience to place this.

Once they get a decline, they usually run up and down the high street throwing mud and hoping it sticks. If it doesn't, you're left with multiple credit searches and no mortgage.

Speak to an experienced independent broker and see what's possible. You may not get this away at 95% though.

gibs83

kingstreet wrote: »

An EA advisor will probably not have the time, the interest or the experience to place this.

Once they get a decline, they usually run up and down the high street throwing mud and hoping it sticks. If it doesn't, you're left with multiple credit searches and no mortgage.

Speak to an experienced independent broker and see what's possible. You may not get this away at 95% though.

Thanks. That is what I am worried about, I am already being affected by credit searches that have been done in the last 12 month and do not want any others really if there is no hope of this happening.

We could just wait it out for another 6 month and try again but we've seen a house that needs a bit of work that could be a good way for us to get on the ladder at reasonable monthly repayments.

Thrugelmir

Settle any credit balances and clear your overdraft as a priority. Then start saving. You've a good joint income and aren't looking to borrow an excessive amount. So being proactive while the CCJ ages will count in your favour.

gibs83

Thrugelmir wrote: »

Settle any credit balances and clear your overdraft as a priority. Then start saving. You've a good joint income and aren't looking to borrow an excessive amount. So being proactive while the CCJ ages will count in your favour.

Thanks. It would be 5k to clear my OD/CC leaving me with one car payment and that is what we had planned to do. It's only because this house came up for sale that we were trying to get something sorted now as we think its a great price for the house.

We would still have enough left over to pay off card/OD as the mortgage would be similar to the rent we pay now anyway. Was hoping there would be some lender that may take into account my debts being relatively low in comparison to salary although I can see why I would be deemed a risk given they are only a few month old.

Thrugelmir

Many lenders like to see borrowers having the discipline to save money every month for a deposit. Not to have borrowed the money, i.e. the easy way. The higher the LTV the more important this becomes. As a mortgage is a long term commitment. Over 25 years you'll need to make 300 on time payments. Lenders as part of the credit checking process will be profiling you and assessing the likelihood of you achieving this. Mortgage lending is a low margin business so mainstream lenders are looking to weed out applicants at the outset. Not least that a default account requires time consuming administration which results in a loss to the lender.