Mortgage help!

alabama1985

Hi all,

I’ve posted a few times on the forum about several things but wanted to paint a whole picture to get some advice as worried sick and losing sleep.

Myself and my husband rent a house from my parents, due to their age this June they will have to end the mortgage or sell to us, we desperately need to buy the place as we live here with our 2 little ones.

We got ourselves into a pickle with credit card debt (about £10k) which we’ve never missed a payment with, but my dad is very kindly offered to gift us instead Of deposit help and that will be all sorted and paid off in full this week (as well as closing some of the cc account entirely)

we also have savings/deposit of nearly £15k.

My concern is that we need the
Mortgage by June, our credit scores are ok, my husbands is better, and I’m sure now the cards are being paid off they will improve dramatically over the next month or so, as will our disposable income, we were paying approx £300 a month to credit cards and this will now be eliminated.

I had 2 ccjs (small amounts, satisfied a couple of years ago) that don’t drop off until September this year (however for some reason they don’t show on Equifax??)
I also have a default from 2014 which is now a small amount of £300 , I am going to pay this off before we apply so it’s satisfied, but obviously it still shows on my report until next year.

Our salaries are:

Husband:
£21,500
Plus a self employed business which he’s had for 2 years, take home from last year £6000, £3000 the year before

Myself:
£10,481
Plus child benefit of £1644 per annum (kids are 1 and 4)


The house is £158,000

My question is, will we be ok for a mortgage now that he debt is being paid off? I know it’s unlikely to be high street due to my ccjs and default, but I’m just worried as the credit cards are only just being paid off, and we are aiming to apply around April. As I said eveything else has always been paid on time, and no missed payments since around 2015.

Thanks in advance,

Blueoctopus

Hi,
I'm going to be honest I can't see you being able to borrow that much.
We bought the house we rented from my parents last year on similar salaries (around 30,000 combined plus child benefit for two children) we have no adverse credit, or child care costs and only £2000 credit card balance. We were able to borrow a maximum of 104,000.
Luckily the outstanding balance on my parents mortgage was 90,000 and they were willing to gift us the equity in the house meaning we could go ahead and with an excellent LTV.
Would this be a possibility for you?

alabama1985

Bump thanks

silvercar

Lenders will often allow an extension for a few months to an interest only mortgage, so it may be that your parents could keep the mortgage going until September if that makes things easier for you.

Pay your 2014 debt off as soon as you can, so you can apply with a clean slate. It will look better than a statement that you can pay it off.

alabama1985

silvercar wrote: »

Lenders will often allow an extension for a few months to an interest only mortgage, so it may be that your parents could keep the mortgage going until September if that makes things easier for you.

Pay your 2014 debt off as soon as you can, so you can apply with a clean slate. It will look better than a statement that you can pay it off.

Ok great theirs is an interest only mortgage so perhaps that will be an option, thanks!

tlc678910

Hi,
Can I enquire about the mortgage ending in June. Is it the entire mortgage that is ending (after 15/20 year term or whatever) or is it the promotional period such as a 5 year fix?

Do your parents owe £158,000 or do they owe less? If there is equity do your parents need the money or could they gift you early inheritance (altering their will to reflect this if you have siblings) to bring down the amount that you need to raise.

Tlc

enthusiasticsaver

How old are your parents? That will determine whether an extension will be allowed.

What mortgage are you looking for? The value of the property is £158k but you will not be allowed 100% so you will need at least a 10% deposit so £15800. You will also need to find costs for surveys and legal costs and stamp duty .


Generally lenders will lend up to 4 times gross income although some go higher. You would be best going to a broker who specialises in bad credit records or if your parents are able to get an extension delay it until your records are better. You might have an issue with your husbands self employment income as usually they like to see 3 years accounts but again some lenders are less fussy which is why a broker would be a good idea for you. If they take your husbands SE income and they are happy to overlook the bad credit then you might be able to get enough to buy the property.