FTB adverse mortgage

boom87

A bit of advice if you please, FTB looking to use htb, but credit file isn't great. 3 defaults due to fall off late this year, early next year ( may 21 is the last one to go) and a ccj that's 2 years old for 1700 which is also related to one of those defaults. 

Using a broker we have an aip with a sub prime lender @ 4.2% 

However I've heard some more prime lenders will ignore settled ccj's over 3 years old, and since all the defaults will have also have vanished, what are the odds of getting a better acceptance in 12-15m time?

Darkslider

What deposit have you got saved up? If you're looking at 95% LTV then a 4.2% mortgage rate isn't miles out of the ballpark for to be honest, but if you've got 20% saved up it's a pretty poor deal! 
I'd say yes your chances will be better the longer you leave your defaults to age, but the problem is balancing that with the rate house prices and interest might both rise while you're waiting, wiping out any potential savings. That's before you take into account the next 12-18 months rent payments if you're making those too!

Your broker should be best placed to advise you really but I think if I were in your position I'd be looking to get onto the ladder fairly soon to benefit from the slashed interest rates at the moment. The economic climate is so unpredictable right now though I don't think you'll get a definitive answer from anyone, and anyone who claims they know exactly what's going to happen is probably not to be trusted anyway!

boom87

I have 5% but 20% from help to buy, so looking for a 75% mortgage

Mortagesteve

Hi boom87,
If you can wait, then wait 12 - 18 months and try a high street lender where the interest rate could be better. The answer I sense will be if you see a property now and want to but it today!

ACG

I think you are slightly mistaken, it is not that lenders will "ignore" defaults/CCJs over a certain age it is more that it begins to fit criteria with those lenders. It would still need to pass the credit score which takes into account your whole credit report. 

I think that CCJ combined with the defaults is probably a bit of a killer in getting normal high street rates for the time being. I suppose you have the option, take the hit on the rate for the next 2 years (but in turn you may be saving on paying rent?) or hold fire and get a better rate once those defaults start dropping off. 

I dont think there is a right or wrong answer, more a case of what works best for you. 

boom87

Oh I absolutely get that im not high street now, just curious to how close to high street I'd be next year with a 3yr old settles ccj and no defaults as they will have gone

ACG

Dont limit yourself, some of the speciliast lenders offer rates from around 3.5% with a 15% deposit so whilst not market leading, certainly not expensive, some building societies are also pretty good with adverse. 

We had one last year where both applicants had had failed IVAs and then went bankrupt and we managed to get them a rate of 2.9% with a 10% deposit. So adverse over 3 years old, might be able to get normal rates even if not on the high street. Im not trying to make our job sound like rocket science but a lot of adverse can be overcome at normal rates it just takes time finding the right lender or underwriter - that is more the case where any adverse comes from the same kind of 6 month period. If you have had 4 defaults every year for the last 4 years then realistically that shows consistency but not the good kind.  

boom87

Ah ok, so at the minute the defaults are 5 years old and ccj two and not yet settled, so does the 4.2 sound reasonable for now? Seems like there's a chance that in 12m I could save a fair bit of money a long with having more deposit