Far from straightforward, what’s the chance of being given the green light?

Lucky7s

Hi,

I am after some help regarding a mortgage, Our situation is not a straight forward one, which is why I hoping your combined knowledge maybe able to give us some guidance.

We voluntary surrendered our property back in March 2016, there was a very small shortfall after the sale in August 2016 which was paid in full in September 2016.

We are currently renting off my father and would like to purchase the house in October (ish) of this year. The house is valued at £140k and he would let us buy it for £110k. We’ll have £20k in savings. We have approx 3.5k outstanding on a credit card, which will be cleared by April 19.

We are not massive earners - my husband is on 19k and i work part time earning approx 10.5k. We also receive 3k in tax credit & 1800 child benefit (I’m not sure if they’re taken into consideration?!)

What are chances of being accepted for a mortgage??

Any advise is massively appreciated. TIA

enthusiasticsaver

Have you checked your credit file? Are there defaults showing from the mortgage before you surrendered it? Your income should be enough to get a £90k mortgage. I would go and see a mortgage broker particularly if there is anything showing your credit file. Check Noddle. A broker should know which lenders might consider you.

ACG

There will be options, especially if you are putting down that you are buying it for £140k and only need a mortgage of around £90-100k.

The rates will probably not be pretty as it has not been that long since the repossession. You do really need to get your credit reports and speak to a broker.

Lucky7s

Thank you both for your reply. I have checked both my equifax & Experian credit files. The repossession shows on the Equifax file but not the Experian. My Experian score is ‘excellent’ & Equifax is ‘fair’.

My husbands however seems to have taken more of a hit & is ‘poor’. I’m guessing this is because the mortgage was the only thing he had ever taken finance for and this hadn’t ended well. He’s since applied & been accepted for a credit card which we now put our fuel on & pay the full balance off each month to hopefully improve this.

I thought a broker would be the way forward, but that in its self seems to be a bit of a mind field. There’s so many out there - any pointers what I should be looking for?

Again, thank you for your help

Lucky7s

Sorry I’ve just realised I hadn’t answered a question; mortgage was paid on time up until We hadn’t the keys back. There was no defaults until then. Alls that’s showing on the credit files is the date of the default (shows March 16) and the date of settlement (Aug 16) months in between are blank.

The property repossessed was a shared ownership flat. We always paid the mortgage on time, but stopped paying the extortionate rent!

enthusiasticsaver

You need a broker who specialises in poor credit records. Might be expensive though.

Bermonia

I’d be concerned that you’re affordability may be the bigger issue here - incomes aren’t great and looking to borrow towards the top end of what your salary’s would get you, however given that you have at least one child this will likely impact what size mortgage you can ‘afford’ as lenders will factor in the financial burden of having kids as well as your other commitments.

Speak with a broker and see where you stand.

Lucky7s

Thanks again for your advice.

I’ve enquired with a couple of brokers to test the waters. Fingers crossed ��

Thrugelmir

Have you factored in any tax liabilities your father has in disposing of the property.

Lucky7s

Thrugelmir, I’m aware that there’ll be a tax bill - although unsure on what we’re looking at. Any pointers how we can calculate this?? Thanks