Mortgage advice with pending insurance debt

georgiaaffleck

Hi, 
My partner and I are looking at getting a mortgage but 7 years ago I had an uninsured car accident (stupid, I know). The woman who is claiming against me is currently stacking a bill which will come out of my pocket due to having no insurance. The current figure is around £30,000. I intend to pay this off monthly when the final bill comes through, but my question is... is it better to hold off getting my mortgage until this debt finally settles - or would it be best to apply and get my mortgage beforehand? Will my debt affect my mortgage or will they be able to take my house as a potential collateral?

[Deleted User]

If i was owed 30k from someone who just bought a house I would probably apply to the courts for some sort of charging order that would give me security to recover the funds via repossession if you didn't stick to a payment arrangement.  
So either way if this person is smart they will take the house as security. 

You also have to answer the mortgage application about any upcoming changes to financial circumstances.   The ambiguity of it might put a few lenders off.   

I did one similar with a 7k debt dealt with through courts.   About 2 months after the house purchase completed the solicitor acting on the debt applied for a charging order to give them more security.    Mortgage wise - i got rejected from a few high streets and we ended up at a rate a bit higher than ideal but it went through eventually

Your house would be safer if you took a personal loan to repay the woman in a lump sum and the you repay the unsecured personal loan

Thrugelmir

Are you intending not to declare the liability on your mortgage application form? 

ACG

Have you or will you end up with a criminal record? That could be the bigger issue.

georgiaaffleck

No there’s no criminal record, that was all dealt with around the time of it happening. 

Thank you for the replies, I won’t be able to get a personal loan for 30k, I highly doubt anyway. 

I would declare liability but I wasn’t sure wether to declare an impending debt would be better than already having it when making the application. 

[Deleted User]

Probably better to have it prior to application as otherwise you would be guessing at the numbers.

Is the woman going to try register a judgement with the courts? 

MovingForwards

I will touch upon the legal side, as the brokers are assisting with the mortgage side.

Have proceedings been issued? If not, she is out of time for PI and normal uninsured money/ out of pocket losses / expenses (3 and 6 years respectively assuming England / Wales). 

What kind of budget are you looking at for buying?

How does your income / outgoings sit with trying to pay £30k + off over instalments and what kind of payment would you offer?

If I was acting for the woman and had issued proceedings, I would be checking where you were living and having my eye on any property you buy. Buying title deeds from the land registry each time you moved.

There's also the risk they (solicitors) will look at bankruptcy if you have a house in your name / joint names. Potentially there would be equity after a few years and the equity from the initial mortgage deposit.

Would your OHs income be enough to buy a home? That way if proceedings have been issued, judgment obtained with a confirmed figure, 6 years after the CCJ has been obtained and instalments met without fail or being late, it's harder (not impossible) to enforce the judgment but requires permission from the court.

I dont want to alarm you, just provide some guidance for you to consider and weigh up what's the best route to take.

georgiaaffleck

The claimant has already been paid via her insurers at the end of 2019, I am awaiting a bill from the insurance company of the car I was driving (not my insurance). The incident happened 8years ago and I went to a magistrate’s court with a lucky escape of only obtaining 8points (which have now gone). Myself being NHS and my partner being in the British Army our source of income is safe and guaranteed (no chance of redundancy etc ) we will be able to afford the housing costs and outgoings. Regarding my little matter I would look to pay if possible the lowest back to the insurers as I can weekly for my own security. We have spoken to the claimants insurers asking for a rough timeline and everytime get the response of “ we are unsure and unable to clarify a specific resolution date”. Our budget for a property is £180,000 we have been offered from a high street bank a prelim offer off £233,500 so very much in the comfort zone there. The other problem I have is that this property is for me and my partner but also his child from a previous relationship so worried that something I did along time ago might affect our home as well as my partners child. Thank you ever so much for you response I’m really over my head in all of this and any advice is greatly appreciated and welcome.