First-time buyer with (extremely) rubbish credit: what are my options?

AdrianC

Doozergirl wrote: »

That just reads as rude.

Then the OP has my apologies. I was not aiming for rude - merely sarcasm at his lack of self-awareness as to the realities of his situation.

Borealis

Two years ago. Just two years... You got into financial problems, that you ignored right up until a court of law gave you a wake-up call and a slap around the chops. So... YOU EVENTUALLY PAID WHAT YOU OWED! Well done you...

Now, only two years later, you seem surprised that people aren't queueing up to lend you many tens of thousands of pounds over a timescale 15x as long as the just two years since you were in deep financial problems...

How odd. Who'd have thought it?

And, on top of your odd ideas about the legal fees, you "need" to buy now because your tenancy ends this month? Wow.

Then the OP has my apologies. I was not aiming for rude - merely sarcasm at his lack of self-awareness as to the realities of his situation.

The specific circumstances of the CCJ are not something I particularly want to discuss, but I will. I had committed myself to studying for a master's degree under the expectation that the tuition fee money was going to be loaned to me by a relative, and I'd pay them back upon graduating. They became terminally ill, I ended functioning as their carer while studying full time, while also working two freelance positions to pay for the extremely expensive train travel fares to London. This relative died and I never received the money and I found myself in a position with no way to pay my fees. To make things harder, I was living with my parents at the time (within commuting distance of London) and both of them were made redundant simultaneously. They had to sell up quick and moved to a cheaper part of the country (not within commuting distance of London). This put me in a position where I had a part-time income, nowhere to live while having to study for my degree.

To put it mildly, I was stressed, and my mental health took a nosedive. My biggest mistake was not telling the university about the specifics of the situation (why? I don't know exactly, but I wasn't in the best state of mind at the time), and the university never outlined my options (apparently I could have taken a year out from my degree - good to know in hindsight). Even so, I didn't ignore them, I just didn't have any money and no sensible way of acquiring lots of money in a short time frame because I was studying full time. The university didn't seem to realise the difficult situation I was in.

However, I not only completed this degree, I did paid work every breathing second I had and saved up £8000 in three months to pay my fees back, plus my various living costs, while struggling with pretty serious depression. In the two years since then I have saved up a 10% deposit and additional savings by working a full-time job (not some massively overpaid job either - a regular average salary) plus doing freelance works in the evenings. Personally, I don't think I've done badly all things considered.

A personal revelation through all of this is that debt/financial difficulties are not always the result of negligence or irresponsible financial management. I'm an organised, pedantic person by nature, but I had a string of bad luck and was put in an impossible situation. I've thought of how I could have done things different in hindsight excessively since - many a sleepless night - but I'm past it and I'm keen to move on now. I'm treating it as a learning experience and I'm sure as hell never, ever getting myself into such a situation again. Had I not gone back to university I'd have stayed in the job I had before and been fine.

And yes, my tenancy runs out very soon. I perhaps made the silly decision to wait until June to begin looking for new tenancies because of the tenancy fees ban that came into action this month. There is nothing - no exaggeration. I'm constantly searching for rental flats and house shares, and typically they disappear within hours of going up on Spareroom, Gumtree, RightMove - you name it. I've used up nearly a week of annual leave already this year doing last-minute property views only for nothing to come to fruition. I have lived in six places in two years, including several weeks on end on friends' sofas. I rented two flats that I was very happy in only for the owners to sell those flats and I had to move out - pure bad luck. I've spent nearly £1000 on agency fees alone for tenancies, hence why I was looking forward to the June agency fee ban.

Do I have to buy? No, but it would honestly be a huge relief to know where I am living from one day to the next, to be able to have my pet living with me (that I've had since I was 10 years old) rather than relying on relatives to look after it, to go on holiday without feeling guilty, to take up my hobbies again rather than spending every spare moment doing paid work, to put down roots and make friends in my area because I know I'm not going to be moving again soon, etc.

For me, desperation is settling in so I can have some form of stability. Given that I'm never going back to study full time and I'm never going to be out of a job (I have a PGCE and they're desperate for teachers in my subject area...should things go belly-up in my current job I just go back into teaching), I'd say I'm pretty safe. Like I said, I was planning on giving tenancies another year, but I'd rather not.

I'm not lacking self-awareness. I think I made it clear in my original post that I know I'm not exactly in prime negotiating territory. What I was surprised by were mortgage broker and solicitor fees being quite so high, but I'll pay them if that's what it takes. I've already gotten a solicitor quote that's a fraction of the one in my original post (one recommended to me by a friend).

Borealis

By renovations are you meaning decorating, flooring and other superficial changes, or anything affecting the fabric of the building? Your reference to 'development potential' is ringing alarm bells. Flats are not houses, the rules are completely different.

I probably didn't phrase this as well as I could have. It is structurally sound. Like I said, I lived in an identical building next door. I only moved out of it because it was sold and I had to! It is leasehold (I've checked the lease length). I'll have to look into the rules concerning the lease, but it does need a new kitchen and bathroom (they're very dated, and carpet in the bathroom is just a big no from me). It needs redecorating, but it's cosmetic. I had my dad come to see the property too so I could get his opinion. He's done a lot of property development over the years and is sort of a DIY mastermind, and he seemed keen. I trust his opinion.

As for the broker, well, the situation is what it is and if you have weighed up the cost of a more expensive mortgage for the next few years against the cost of renting (financial and emotional) and buying still wins, then it's positive, if at a higher cost than you hoped. We move forward - you're not in that horrid financial position anymore and that's something to be grateful for.

I spent this weekend with Excel spreadsheets calculating this! Buying does win, just, and while I need to get this clarified so it's crystal clear, I should be able to re-mortgage within a couple of years. The financial investment is of course part of it, but for me having a stable place to live is the bigger part.

agree with the poster above who suggested finding another broker specialising in adverse credit. It may take longer than ideal; on the other hand, the vendors will probably be aware that property isn't being snapped up within the hour like it used to be. From offer to moving in, even in sellers' markets, it's never been less than 3 months in all the times I've done it. That's with no hitches,everything running like clockwork, which is rare.

Thank you - I really appreciate the encouragement! I'm doing my best. I'm keen to go through a broker because I'm new to this process and learning, but I'm shopping around. I've got a mortgage-in-principle agreed and it's moving (very) fast, but I am encouraged that I have more options than I thought I did originally. I even had a telephone conversation with my current bank and they seem to be willing to meet to discuss with me a mortgage, and they know my credit history.

I'll keep this thread updated should anyone be interested in reading it. I've reassured myself that I'm not financially committed until the end, so if it falls through then it's really not the end of the world. I give myself a year more to save up, and while I'm fed up with renting, I can cope with it.

I'm both excited and terrified, which I reckon is probably standard.

AdrianC

Borealis wrote: »

The specific circumstances of the CCJ are not something I particularly want to discuss, but I will.

We're not the ones you're asking to lend you a lot of money. All the lenders care about is that it's not very long at all since you had to be taken to court before you paid somebody what you owed them. That makes you not a terribly tempting customer for them, because they suspect you might do the same to them.

And yes, my tenancy runs out very soon.

That doesn't mean you have to move, of course, if you mean that the fixed period of your tenancy is up. You simply go to a statutory periodic automatically.

And that's what you'll need to do anyway, because your freshly-accepted offer may turn into completion by the end of August, if all goes fairly smoothly, and summer holidays don't hit too hard.

lookstraightahead

Don't people usually take tuition fees as part of a student loan, like a degree?

Anyway, if I were you, I wouldn't buy yet. I'm not sure how old you are, but if you are "quite young" and have just qualified you might want the flexibility to move with work etc. A property could be a ball and chain. Just save some money and eventually the CCJ will disappear from your file.

Wanderingpomm

AdrianC wrote: »

Two years ago. Just two years... You got into financial problems, that you ignored right up until a court of law gave you a wake-up call and a slap around the chops. So... YOU EVENTUALLY PAID WHAT YOU OWED! Well done you...

Now, only two years later, you seem surprised that people aren't queueing up to lend you many tens of thousands of pounds over a timescale 15x as long as the just two years since you were in deep financial problems...

How odd. Who'd have thought it?

And, on top of your odd ideas about the legal fees, you "need" to buy now because your tenancy ends this month? Wow.

I never understand why people have to be so rude and condescending

sillyhilly

Wanderingpomm wrote: »

I never understand why people have to be so rude and condescending

There are some with posts and imaginary binary-coded 'thanks' in multi-1000s that possess a type of complex where they must make themselves feel superior to those seeking help... Even though that's the very purpose of these forums.

OP, I used an online conveyancer. I won't name them (unless I'm allow to?) and, after an initial hiccup (see posting history - it was a misunderstanding at the end of the day), they turned out to be better than the vendor's bricks and mortar solicitor. Total fees were between £700-800. I would say you're right - £1,500 is higher than it needs to be, although this won't be linked to your financial history. Shop around.

KeithLard

AdrianC wrote: »

Two years ago. Just two years... You got into financial problems, that you ignored right up until a court of law gave you a wake-up call and a slap around the chops. So... YOU EVENTUALLY PAID WHAT YOU OWED! Well done you...

Now, only two years later, you seem surprised that people aren't queueing up to lend you many tens of thousands of pounds over a timescale 15x as long as the just two years since you were in deep financial problems...

How odd. Who'd have thought it?

And, on top of your odd ideas about the legal fees, you "need" to buy now because your tenancy ends this month? Wow.

Long time lurker of MSE, signed up today just to say how disgraceful your post is.

The chip on your shoulder is unreal, the OP even went into detail about what caused them to end up in debt and there isn't one ounce of compassion from you, you should be ashamed of yourself you clown.

kingstreet

There are plenty of brokers who won't charge as much as you are describing for this fairly simple adverse credit case.

An adverse credit lender will usually pay around 0.5% to the broker, so a (eg) £100k mortgage earns £500 commission and a fee of upto £500 should make this a profitable case even with a bit of extra work jumping through the lender's hoops!

Spend more time speaking to local brokers rather than internet-based and national/regionals. The personal service will be worth it.