will we need adverse mortgage?

Minnie82

Hi,

In September we will finally be at the end of our DAS (yay). Then in December our defaults start to fall off, by around 4 months after that they should all be gone. We have no other credit, own car and van outright. I'm intending on us each getting an adverse cc to try and build some history, basically just put shopping on it then repay straight away.

Anyway, there's a chance of us moving in a couple of years, the development beside us is where we would like to be but its at the very beginnings at the moment and the plots we are interested in are probably going to be amongst the last of 295 houses to be up for sale. I expect we will have been out of the DAS for a couple of years and default free for around 18 months apart from one on my file from Vodafone (if I can't get it removed as it's in dispute but settled) which will be around 2.5 years old by then.

I work part time earning around 11k per year, DH self employed but I've been advised because of the work he does, his affordability can be done in a few ways (on remittance to the company he sub-contracts to or some other ways) his gross income sits around 65k. House price around 260k and we will have deposit from this house of around 55k. We are obviously in a far better position than we were 5 years ago when we took the DAS, I won't bore you with the details but it came off the back of the building trade seeming to halt overnight, 2nd baby arriving and having to live on CC's then getting hammered with interest and trying to plod on for a long time before realising we just couldn't.

Anyway I'm wondering what our expectations should be mortgage wise, do you think with these timescales we will be looking at scary interest rates or should we be able to get something a bit more normal? I'm clueless with all of this and terrified that we would be looking at scary rates.

Thank you

ACG

We placed a case for someone who had been in a DAS recently.
You would not believe how difficult it was, nobody (us included) had ever come across it and trying to determine where it actually fell in the spectrum of adverse was pretty difficult. Some lenders were classing it as bankruptcy/IVA and others more like a DMP.

With a few years clear, I would expect it to be ok, but it may need to be checked upfront.

Minnie82

Hi,

Thank you. To be honest its not great if some lenders are classing it as an IVO or worse as it's clearly described as a way to avoid these situations by the AIB. All the info I've been able to find points to us being removed from the DAS register upon completion and all trace of it vanishing when the defaults do. I can only see it listed on one of my reports, the other 2 make no mention and apparently its only listed as the CRAs do a DAS registry search each month to produce the report, when you're no longer there they can no longer record it. I will of course be totally honest with whomever we deal with (as I already have been with a broker recommended by the house builder, ust called for a brief chat). Its definitely lacking in information out there though isn't it, I can totally understand why that would make lenders wobble. For us, we pay 870 per month to the DAS and 450 per month to our current mortgage (Halifax) I'd like to keep any new mortgage a few hundred under that if possible as we've made these payments comfortably and it sits not too much over my monthly wage.

ACG

There really is not much out there. Considering we do a lot in the adverse world, I am surprised it is something we have only come across once and some lenders, never.

There are over 80 Mortgage lenders out there. I think in the grand scheme of things, there will be options for you at normal/normal-ish rates.

Minnie82

Thank you, what are normalish rates these days? I'd probably be looking to fix for at least 2 years to allow us to rebuild files for a main stream mortgage next time. Should we be thinking around 2.5% or up at 7/8% I'm honestly clueless!!! I've no idea what rate we pay at the moment lol

ACG

Absolute worst case, I would say around 4.5% but I would like to think it could come in around half that.

Minnie82

Thank you, its really helpful to have a rough idea in mind for working out what payments would likely be. If we expect worst case anything lower is a bonus!