Mortgage with defaults?

billygirl425

Having separated from my husband and being left with debts I now need to either remortgage and buy him out of the property, or sell up.
3 defaults are from 2018.
3 from early 2019.  All unsatisfied.  

House is approx 200k and I will probably need to borrow £110k to buy it, so 55% LTV.
I think I can get him to hold off until the 1st 3 defaults are off, but the 3 others will be 5+ years old when I apply. 

My questions are…will I need an adverse credit broker at that point and am I likely to get a mortgage with a 45% deposit? 

Secondly, would it be wise to try and get the 3 later defaults settled first ( larger amounts so I don’t want to struggle to do this if it will have limited affect).
For info I have had no missed payments on anything since the defaults and run a credit card and have been paying the mortgage solely for 4 years.  

ACG

I think you might struggle to pass the credit scoring needed to get normal rates. You might not because of the LTV but it is difficult to say without more information. 

Failing that, there should be little building societies who sit in a gap between specialise lenders and normal lenders. But I am just doing some work with a couple of specialist lenders for a little project and their rates start at under 3% so not exactly terrible. I think worst case scenario you would be looking at rates of around 3% but there is potential for normal rates deepening on the detail. 

billygirl425

ACG said:

I think you might struggle to pass the credit scoring needed to get normal rates. You might not because of the LTV but it is difficult to say without more information. 

Failing that, there should be little building societies who sit in a gap between specialise lenders and normal lenders. But I am just doing some work with a couple of specialist lenders for a little project and their rates start at under 3% so not exactly terrible. I think worst case scenario you would be looking at rates of around 3% but there is potential for normal rates deepening on the detail. 

Thank you so much for your reply.  That is good news actually.  Obviously I’d rather remortgage at a decent rate but 3% isn’t too horrendous as you say.  At least you sound positive that I would actually be able to remortgage (long term permanent civil service and decent salary so I should easily meet the financial criteria). 

So do you think it makes a huge difference if the 5+ year defaults are satisfied or not? 

I am guessing I would be better going through a broker then?  I did wonder if to approach my own lender first (Skipton) as we have been with them  many years and have a perfect payment record? 

Skipton_Building_Society_Representative

Hi there, as your existing lender, please feel free to give us a call to on 0356 850 1700 to discuss your options . Thanks - Skipton

ACG

It will increase your chances of high street rates, but again still not a given. I think the number will still prevent you getting high street rates (but dont hold me to that).

The skipton rep raises a good point. Give them a try. We did a mortgage for a couple a few years back, they decided to divorce and the Mrs take the Mortgage on on her own. She did not pass affordability but skipton had this nice little piece of criteria that said if she could evidence she had made the mortgage payments on her own with no financial help from the ex, they would consider letting her take the mortgage on alone. I seem to recall she still had to pass a credit check so you might still struggle but I do like Skipton. They have all these nice quirky rules and exceptions can sometimes be made, so there is no harm in giving them a try first, especially as the alternative would be lenders who do no credit score. That means a credit check should not affect the outcome of any future applications with little building societies or specialist lenders. 

billygirl425

Just resurrecting this thread as I’m 10 months on and still very much in the same situation.  Wondering if the market has changed at all in the last year with interest rate increases? 

Also wondering if anyone has had any success in remortgaging recently in similar circumstances (3 unsettled defaults - will be 5.5 years old and likely 50% deposit) 

Thanks