What should we do?

wifey24

Hello

My husband and i are looking to buy our first home together and we found a nice house very close to my work which is great. My job is very demanding (husband is self employed and works less hours than me) and with the commute added, we do not get to spend as much time together as we would like.

After our offer of £330 000 was accepted in April, we applied for a mortgage with Woolwich. My husband is providing a large chunk of the deposit £215 000 and i will be the only contributing party on the mortgage. To prepare for the purchase, i looked up my credit reports like you are meant too and all looked fine however, thinking that as i was the only contributing person on the mortgage and most issues we might have will be on me, we did not check my husband's credit file as well. He has 3 months late payments recorded on his file by T Mobile from when he was on contract last year. The account has been settled but 2 of the late payments were in the last 6 months:eek:

Woolwich have come back and said unless the late payments are removed from his file by T Mobile, they will be declining our mortgage application . The call with T Mobile seemed to go well but they told us we have to wait 7 days for their credit team to look at the request and inform the credit agencies. I have no idea if this means they will actually agree to remove them. The rate we were getting with Woolwich was 2.19% which was great for a 5 year fix.

Our vendors have already been patient with us since the start of April when our offer was accepted but they need to know the sale is secure for when they offer on their next family home. We really like the house and the location is fantastic so we do not want to lose it.

Apart from just waiting to see how things pan out with T Mobile which could take more time than we might have, we have a couple of options. The first one is to go and find a mortgage broker who specialises with adverse credit mortgages who might be able to get us an offer, most likely at a slightly higher rate (one quote was 2.54%) and much much higher fees as well (considering our LTV). This will have the disadvantage of tying my husband's credit history with mine which has consequences for the future. The next option is that my husband borrows money from family to pay for the house and we use up all our savings (some of which make 5% interest) to buy the house without a mortgage and just pay back the loan (£20 000) to his family. This option leaves us cash poor with everything in the house but at least my credit report is clean for the future. I have as such several options.

1. I could get a bad credit mortgage at 2.54, and have a bad credit rating.

2. My husband could borrow money from his family and we could use up all our savings and buy the house with cash

3. We could wait and hope for T mobile to remove the record, and maybe get the awesome 2.19 rate from Barclays.

I don't know what the best thing to do is and i do not want to make a bad decision because of short term thinking. I would really appreciate all advice given.

Thank you in advance!!

King_Slayer

I assume that if you are married and your husband is contributing to the deposit (as I assume this isn't a gift) then I would imagine you would then be financially associated anyway, so this will link on your credit history.

Didn't realise 2.5 was a bad credit mortgage?? I'd love to have a 2.5

However if the concern is your husbands credit, is it possible for him to gift you the deposit and apply solely? (I'm not certain of the legalities with this)

Good luck either way and fingers crossed that it was an error and T-mobile can resolve it. Then all will be well. :j

King_Slayer

I also intended to say with your deposit, I'm sure a Mortgage Broker will be able to find you a suitable lender.

Thrugelmir

wifey24 wrote: »

My husband is providing a large chunk of the deposit £215 000 and i will be the only contributing party on the mortgage.

You can't pick and choose when to have a financial association or not.

grifferz

wifey24 wrote: »

2. My husband could borrow money from his family and we could use up all our savings and buy the house with cash

If that is actually feasible then why not do that? Borrowing from family is more pleasant than borrowing from a bank, and savings are usually best used to clear your debts.

wifey24 wrote: »

3. We could wait and hope for T mobile to remove the record, and maybe get the awesome 2.19 rate from Barclays.

If option 2 wasn't actually a feasible option then you could presumably take a 2 year fix at 2.54% and overpay it where possible, give time for the bad credit to fall off your husband's report and then remortgage on to the 2.19% or whatever is best offered at that time?

Across 2 years this probably won't cost you that much more, got to be less than having your purchase fall through and having to start again I should think?