Mortgage Application Question

LadyAlex90

Hi All,

Myself and my fianc! are looking at buying our first house. We have a 5% deposit and both work full time. I earn £42k and he earns £60k. The problem is that I am on a debt management plan which I have been making regular payments to for about 2 years (never missed a payment). I don’t have any other debts but did have a small payday loan in 2019.

Would the best option be for my partner to apply for the mortgage solely which would of course mean he was going off his salary alone, or include me and my salary on the application but also the dodgy credit history that I bring?

Also if my partner got a mortgage of his own would that mean that I would have no ownership despite me proving 50% of the deposit?

Any help and advice much appreciated, thanks!
Alex

MovingForwards

You speak with a whole of market mortgage broker, who deals with adverse lenders.

Being in a DMP for 2 years will be acceptable and your payments taken into account with affordability.

How much do you still owe?

What month was your PDL as the adverse lenders don't accept them in the last 12 months.

If you are paying into the deposit you should be included in the mortgage.

Thrugelmir

Use your share of the deposit to clear your debts. As doesn't reflect well on you as a potential borrower.

haras_nosirrah

There are lenders who will accept a dmp as long as you can evidence 12 months of satisfactory payments to it.

An adverse credit mortgage will cost a bit more than high street however you then have the protection of it being a joint property. A lot of lenders Also wouldn't like a person gifting some of the deposit and remaining in the property (also that is also doable)

Why not speak to a whole of market broker to gauge your options. If you don't have one then read the boards and message a broker from here who you feel gives good advice. There are many excellent brokers who post here who, while not allowed to approach people, are happy ro respond to a pm asking for help

MovingForwards

Thrugelmir wrote: »

Use your share of the deposit to clear your debts. As doesn't reflect well on you as a potential borrower.

Lenders are funny and think people have only cleared their debts to get a mortgage, need to have 6 - 12 months after clearing the debts,

But

The issue OP will have in clearing her debts is they must be done via her DMC as if she cancels the DMP to pay the debts herself it's classed as as DMP failing and she then needs a clear 12 months after that before applying for a mortgage.

If it's a self-managed DMP that's classed as an arrangement with the creditors, guess what? Lenders dont like that either :rotfl:

(Comments based on what I have experienced)

ACG

I think you might struggle applying jointly.
5% deposit limits your options, DMP limits your options quite severely and so will a PDL in the last 12 months.

All 3 combined will be difficult.

I think you would need to look at doing a single application personally or get your deposit up to probably 15%.

RelievedSheff

I personally think you would be better off waiting a little longer, paying off some or all of your debts if possible and building up a larger deposit.

By all means speak to a broker who specializes on adverse mortgages but I think that your options, if any, will be very limited and at very high rates.