Is Sub-Prime our only option?

Halfie

My partner and I are looking to move but will need a joint mortgage to do so. Current house is in partners name only as he bought it before we met, it has equity of £100k and we would be looking at a new property around £300k

We have a joint income of around £80k basic, however where my partner used to earn the lions share, he changed jobs 18 months ago and now does something he loves but is less well paid. Because of this, we cannot get a larger mortgage in his name only however, at the moment we cannot include me on the application as my credit is pretty shocking.

I've got 6 defaults on my credit files and these have all been settled (partial amount):
A) Defaulted Dec 2017, Settled April 2019
Defaulted Jul 2016, Settled July 2017
C) Defaulted Sep 2016, Settled July 2017
D) Defaulted Nov 2017, Settled Apr 2018
E) Defaulted July 2017, Settled Apr 2019
F) Defaulted Sept 2017, Settled Apr 2019

I've been told that high street lenders won't look at anyone who's had more than 4 defaults in the last 4 years - does that mean our only option is for a sub-prime lender and as such be subject to higher rates?

Partner's credit is as clean as a whistle and not even a missed payment in the last goodness knows how long! I know we will need to use a broker however I don't want to think about moving if we're going to have to increase mortgage payments by something ridiculous.

Any help/advice would be much appreciated.

Thanks!

ACG

Halfie wrote: »

I've been told that high street lenders won't look at anyone who's had more than 4 defaults in the last 4 years

Who told you that? There are no such criteria and some lenders do not have specific adverse criteria but just allow their system to score your application.

At 65% LTV, there is a possibility of high street lenders but I would not want to commit to saying it is a definitive.

That being said, sub prime lenders now start from around 2.5% so in the grand scheme of things not too bad, although you would probably be looking around 3.5%-4% as a worst case scenario as a ball park idea.

Halfie

ACG wrote: »

Who told you that? There are no such criteria and some lenders do not have specific adverse criteria but just allow their system to score your application.

At 65% LTV, there is a possibility of high street lenders but I would not want to commit to saying it is a definitive.

My friend has less than desirable credit and they were told that by their broker...

I'm guessing Halifax would be the only High Street that would consider us?

ACG

There are maybe 1 or 2 others.

(I would also use a different broker to your friend).

Halfie

ACG wrote: »

There are maybe 1 or 2 others.

(I would also use a different broker to your friend).

:rotfl::rotfl::rotfl:

Thank you! Maybe not all is lost then

ACG

I am just thinking about this, I wonder if I am being unfair on your friends broker. Maybe they said something along the lines of "it is unlikely you would get a high street lender with 4 defaults" which with Chinese whispers has become what you mentioned?

If that were the case, I suppose it could be said the broker is just trying to set your friends expectations?

Halfie

ACG wrote: »

I am just thinking about this, I wonder if I am being unfair on your friends broker. Maybe they said something along the lines of "it is unlikely you would get a high street lender with 4 defaults" which with Chinese whispers has become what you mentioned?

If that were the case, I suppose it could be said the broker is just trying to set your friends expectations?

That's possible.

We've done an AIP with Halifax and they declined. I think we'll have to try again in a few months time.

ACG

It is unlikely a few months will make a significant difference.

I could be wrong but I do not think a couple of months will make any difference. You are probably talking more like 12-18 months. A couple of months see minor improvements and I suspect this is probably not a borderline case.

It might be worth having someone investigate the more specialist part of the market. You may be pleasantly surprised at what is available. We did one last year and the applicants mortgage rate was lower than my first mortgage 5 years ago - same size deposit, the only difference being they had a few defaults where as I did not. The adverse market is probably as good as now as it ever will be.

lumpyspaceprincess

There are non high street lenders that may consider you, as the defaults are over a year old - I definitely recommend speaking to a broker that specialises in this area, they'll have the best advice