Mortgage after debt management plan... is there hope?

Becktacular

Hi, I'm really hoping for some advice on what I need to do.

Me and my husband are 37 with 2 kids. We are renting and never thought we'd be able to get a mortgage as we live in Bristol and a 3 bed house here in a not awful area is gonna be at least 300k.

Suddenly both of our mums are in a position to gift us a large amount of money which they want us to use to buy a house. About 60k each.

I have literally just settled my debt management plan off early, so there will be missed payments and 3 defaults showing on my credit file.

Hubby has a fairly decent credit rating and will shortly be settling his loan off with money gifted from his mum. We don't have any joint finance so he never had to be so affected by my bad credit rating.

So... how long until mortgage lenders would consider us?

- Hubby earns 30k a year
- I earn 13,500 a year
- gifted deposit of 100k (we'd prob need to keep a bit of the full 120k back for moving costs and sorting out the house)
- House would be about 300k

Is any if this even possible?! 

We could save now we will be debt free, with lifetime isas we could probably get to about 20k in 3 years.

I'm thinking we'd need to do this by the time we're 40ish as I'm worried lenders won't want to lend after that because of retirement etc...

MovingForwards

Yes, there is life after DMP's.

Generally it's 4.5x income, less some due to having kids.

12 months post DMP for some lenders, longer for others.

You've not said the age of the missed payments and defaults, or whether there's a DMP marker on your credit file.

Lenders do lend to older people, some of us were mid 40's, others early to mid 50's. Lending into retirement may be a possibility, that depends on what pensions you'll have.

A good independent, whole of market mortgage broker will be useful.

@ACG is a good guy, helped several of us buy homes by placing us with the right lender for our circumstances. He may be able to shed a bit more light.

springmagpie

We were in a similar position and went with an adverse lender, I would find a specialist broker. We ended up with Bluestone Mortgages 

Becktacular

MovingForwards said:

Yes, there is life after DMP's.

Generally it's 4.5x income, less some due to having kids.

12 months post DMP for some lenders, longer for others.

You've not said the age of the missed payments and defaults, or whether there's a DMP marker on your credit file.

Lenders do lend to older people, some of us were mid 40's, others early to mid 50's. Lending into retirement may be a possibility, that depends on what pensions you'll have.

A good independent, whole of market mortgage broker will be useful.

@ACG is a good guy, helped several of us buy homes by placing us with the right lender for our circumstances. He may be able to shed a bit more light.

Thanks so much, this is really encouraging!

The defaults are dated Apr 2019, missed payments have been recorded every month by one of the lenders, so they will end now it's all been settled off.

I can't see a note on my file about a DMP but not sure if I'm looking in the right place!

ACG

With your deposit being as it is, you can probably get a mortgage even if the DMP were still in place. 
With it being satisfied it should open your options a little more.

Edited this part:
I think rate wise you are probably looking at around the 4-5% mark. 

Becktacular

ACG said:

With your deposit being as it is, you can probably get a mortgage even if the DMP were still in place. 
With it being satisfied it should open your options a little more.

Edited this part:
I think rate wise you are probably looking at around the 4-5% mark. 

That's brilliant. Thank you! It'll be a little while before all the money is available, at least a year or two so I think working on the basis of it being 3 years time seems more than doable and we will have saved our own contribution by then as well. Yay!!

ACG

3 years will probably see you get normal rates or near normal rates - what normal rates will look like in 6 months let alone 12-24 months I have no idea... So dont quote me on those rates. 

Becktacular

Just resurrecting this thread - we are still waiting for my MIL’s house move to complete which will then release some money she will be giving us for a deposit (she had some buyers really mess her around and string her along for 11 months, lost that sale and had to start again)
My question now to @acg or anyone else who might know, is about rates - obviously they have all gone up massively and my thoughts with us having adverse credit is that those rates will be even more again and the whole dream of buying a house where we live will no longer be possible…

just wanted to check in as our situation is the same as before, we should have up to 120k deposit, no current debts at all but I have 2 defaults from 2019 on my credit history. Looking at houses around 300k