Guarantor Mortgage with very bad credit?

beepboopbeep

Hello,
My husband and I have a "very poor" credit rating on Experian as we are half way through a debt relief order (DRO). However if we revoke / cancel this and pay off our debts (using a gift from my grandfather) would it be possible to get a guarantor mortgage with my father as the guarantor? (He owns his own house and has a good credit score). Just wondered if a bank would still need us to have a certain level of a credit score if my father was going to be the guarantor?
Any advice would be very appreciated, thank you 

MovingForwards

I would say not as the DRO has done the damage and won't be accepted by lenders for at least 12 months after discharge. Some will never lend to you because of it.

The time to have the gift from the grandfather was before doing the DRO.

Ignore the credit score as it's not seen or used by most UK financial institutions, it's the credit history they see and use when assessing applications.

@ACG is the resident adverse credit mortgage broker @haras_n0sirrah also deals with adverse credit. 

beepboopbeep

Thanks for your reply. 
I'd read that cancelling (nullifying) bankruptcy would enable the bankruptcy to be removed from your credit file and history so I had hoped that revoking a DRO would do the same? Is that not the case? 
We've used my Dad as a guarantor for renting our flat and as such the credit check agency has completely overlooked our poor credit history - but I suppose this wouldn't be the case for a guarantor mortgage? 

mortgagetakingages

beepboopbeep said:

Thanks for your reply. 
I'd read that cancelling (nullifying) bankruptcy would enable the bankruptcy to be removed from your credit file and history so I had hoped that revoking a DRO would do the same? Is that not the case? 
We've used my Dad as a guarantor for renting our flat and as such the credit check agency has completely overlooked our poor credit history - but I suppose this wouldn't be the case for a guarantor mortgage? 

A house purchase is totally different to renting. Why not ask your father to but to let and you can rent from him with the plan he will gift you the house after 6 years. 

DCFC79

Whatever you do dont do it in the belief/hope your credit score will increase as only you can see it. 

Petriix

The best way for you to buy would be to use the gift from your grandfather towards the house purchase with the remainder coming from your father taking out a mortgage against his own property so that you can buy with cash. Then you can pay towards your father's mortgage.

RauHughes

My guess would be that your income/affordability would be a bigger factor than your credit score here. By entering into a DRO, your affordability (or disposable income) was deemed to be below £50 per month. On this basis, how would you afford a mortgage? Your assets would also have been deemed to be below £1,000, so where would the deposit come from? Would Father be gifting you the entire deposit in addition to paying off your debts in full? I'm not a broker, but limited affordability, poor credit history and no deposit contribution yourself seems like it will be a very difficult case to sell to lenders who are already super cautious in the current economic climate.

amnblog

Guarantors do not alter the effect of your credit history on a mortgage application.