(Another) adverse credit mortgage thread

duff9511

Hi all,

My wife and I are considering moving house but have some concerns about securing a mortgage. We currently live in my wife's house and want to buy something together, but my I have quite a few historical debt issues. I have 9 defaults, all over 5 years ago and a couple of CCJs from the same time period. My wife has never missed a single payment on any of her commitments and I've managed my repayments much more sensibly in the past five years and have taken steps such as credit builder credit cards (which now has a limit of £6500) to try and show that I'm more responsible now than i was during my "idiot phase" a few years ago. We've spoken to a broker and have an AIP with Kensington Mortgages, but I'm still quite concerned about affordabilty before a final offer.

We have a combined income of £80k, but have never built up any savings and have quite a bit of unsecured debt. Our son was born 3 months premature, which meant that we hadn't had the chance to build up the savings that we would have like when he arrived so we took out a loan for £13k to cover the £7k shortfall in our savings plan and purchase a new car that we had intended on borrowing for anyway. We also have another loan for £20k (taken to pay for our wedding, which seems a bit excessive in hindsight). In total, there is about £26k left on those two loans. We also have three credit cards totalling £19k, which our broker has said we will need to reduce to under £7500 to secure the loan, which can be done with the equity in the current property. It looks like we constantly live in our overdraft due to these repayments, which will be alleviated by reducing the credit cards as per the broker's advice and intend to clear the overdraft, but I'm not sure whether the mortgage company will see that as sufficient given that our mortgage repayments will be significantly increasing on the new mortgage. Our biggest expenditure by far is childcare at £1000 per month, which we actually pay to my mother in law, but there's not much we can do to get around that short of trying to hide that payment for 3 months, but even that would mean we aren't able to do anything for three months. Our house has been on the market for 7 months and we've just received an acceptable offer.

If you break down our income and essential expenditure, we can easily afford the new mortgage repayments, but it's all of the non-essential stuff like days out, toys/treats for our son and nights away that eat up all of our money. Obviously, we would reduce all of that once we have less disposable income, but would the mortgage company accept that or would they assume that our spending will remain at its current levels and therefore say that the new repayments are unafforable?

Any thoughts or advice would be greatly appreciated. And yes, I know we should have taken steps to rectify this sooner but that's not the kind of helpful advice I'm looking for

csgohan4

That's a lot of debt, how much is the house your trying to buy? it is all about affordability now, I see you have a broker, trust them, unless their estate agent recommended


Hit the debt free wannabee forums to hit that debt

amnblog

csgohan4 wrote: »

trust them, unless their estate agent recommended

Ouch, dont sit on the fence

duff9511

House is £225000, with 90% LTV mortgage.