Mortgage Suggestions for first timer on low income with poor or little credit history

Phoenix901

Could someone please point me in the direction of a mortgage company who offers mortgages to people with poor or no credit history and/or on low incomes.

Thrugelmir

Phoenix901 wrote: »

My family have offered to help us get on the property ladder and could give us the money for the deposit, and i am confident we COULD keep up the repayments on a mortgage if we could get one.

Which lender is going to take your word given you've run up debts and aren't paying them back? Trust is paramount.

MortgageMamma

I don't think you are in a position yet to buy, buying a house with one salary and only 20 hours per week guaranteed is going to be difficult, especially given your inability to work for the time being and the defaults on your credit file.


1. Address the defaults if you can first. It always looks better to have paid them off - if you don't deal with them, how can a lender see you as a "good bet"?


2. Get your wifes working hours increased, establish your budget on her new salary. You don't say what her residency rights are? That will affect mortgage also.


3. Is there any possibility of you returning to work? I know being unable to work is a dark place, I was ill for 7 years and have only recently returned to work. I thought I would never return to work, but yet I have managed even though it took me a long time.


There are some state benefits that can be taken into account for a mortgage, tax credits, long term awards of DLA/PIP etc but ESA is not one of them.


I know the price of the property you want seems like a steal, but how would you pay the mortgage if your wife became unable to work and you were solely dependent on state benefits?


I know this isn't what you want to hear but times your friend, if you want to achieve this, make a plan, set your goals and you can make it happen in the future.

HappyMJ

Phoenix901 wrote: »

that doesn't really answer my question or help me in anyway Thruglemir. :T

I thought it did.

Summary - If you want a mortgage you need to improve your income, your savings and your credit history.

Benefits will not cover the mortgage should you be unable to afford it....benefits will pay housing benefit on a rental property if you can't pay the rent and with no waiting period.

chelseablue

If you cant work due to illness how are you going to do the renovations on the property?

HappyMJ

Phoenix901 wrote: »

Thank you Mortgage Ma..

Well the property is for sale under £40k. (it needs work doing).
A property in the same road sold for 76k last year.

I have been working in the building trade for the last 12 years so renovations can me done by me to save money.

We already have £10k for renovations and I am confident I can borrow 50% for the deposit from a relative. So the mortgage would only be for around £18k.

Is there a mortgage company who will give me or my wife or both of us a mortgage for £18k considering our circumstances? We could probably get a guarantor for the mortgage too.

What are the repayments on £18k? Lets be honest, less than £100 per month.

As far as my credit card debt is concerned these issues have been addressed with help from the CAB and nearly all the creditors have agreed to write off the debts, I am still waiting on a couple of others for a decision but I think all the credit card debt will be written off before the end of 2016.

My wife is working in a proper job in the uk and has all her paperwork in order, she is full time resident and has 5 year resident card. We expect to apply for passport in the next 5 years after she has received indefinite leave to remain.

The must be lender or a scheme which can help us out?

Minimum mortgage is usually £25,000...due to the fees just not making any smaller loan worthwhile.

So...how about a personal loan.

£18,000 over 7 years with Sainsburys at 3.3% would cost you £240 a month. There's no fees, there's no requirement to provide valuations, surveys. You don't need to prove how much you earn. etc...

Your wife will not be considered for a mortgage without ILR and as she is the one working a mortgage will be extremely unlikely.

If the property needs work doing and you do attempt to apply for a mortgage the value will most probably come back as zero...and if not there may be funds that will be under retention...so you'll need the money anyway before purchase to complete the work before the bank releases the money to you after you've purchased it.

Try and borrow the remainder of the purchase price through a relative.

Phoenix901

HappyMJ wrote: »

Minimum mortgage is usually £25,000...due to the fees just not making any smaller loan worthwhile.

So...how about a personal loan.

£18,000 over 7 years with Sainsburys at 3.3% would cost you £240 a month. There's no fees, there's no requirement to provide valuations, surveys. You don't need to prove how much you earn. etc...

Your wife will not be considered for a mortgage without ILR and as she is the one working a mortgage will be extremely unlikely.

If the property needs work doing and you do attempt to apply for a mortgage the value will most probably come back as zero...and if not there may be funds that will be under retention...so you'll need the money anyway before purchase to complete the work before the bank releases the money to you after you've purchased it.

Try and borrow the remainder of the purchase price through a relative.

Thanks HappyMJ for your very USEFUL response, you have provided me with alot of information that I did not know anything about. (i am completely new to this process)
I think the Sainsbury's loan is a good idea and something worth looking into.

:beer:

Bonfire_Bride

Your wife would probably need to apply for a loan. No bank would touch you with the current debts that you have. Financial hardship is horrible and I dont judge people who are going through it. However, wouldnt it be best to focus on getting your cards paid off and getting back on your feet (financially) before committing to other debt.

If you default on a mortgage or secured loan then your house will be repossessed.

You could try a mortgage broker that specialises in bad debt if you are determined to go down the route.

Bonfire_Bride

Also, why do you have 10k for renovations? This could be used to pay off debts and put you in a better position for a future purchase.

Trust me, my house has been on the market for 18 months....there have been numerous properties along the way that I have fallen in love with which have then sold.

If you don't buy this one then there will be others.

Bonfire_Bride

I wouldn't go directly to a mortgage provider. You would need the help of a mortgage broker that specialises in sub prime mortgages.

Google would be your friend here.