5.8% interest rate for adverse credit??

Dapand

Hi could anyone please advise if this rate is too high?

Our broker has come back with Interest rate of 5.8%.

Our situation is as follows.

Myself:
- self employed sole trader decorator since 2018
- 2020-2021 profits after expenses £25k
- 2021-2022 profits after expenses £35k
- 2 defaults (vodafone £500 sep 2018  settled March 2021, virgin media £30 Nov 2017 settled June 2019)
-n power account in arrears for one year but settled early 2021

Partner:
- full time employed £22k per year & £3k child benefit
-1 default BT September 2018 £1374 settled March 2021
-2 ccj (Aug 2017 £450 settled April 2020) & (July 2018 £376 settled July 2019)
- seven trent water arrears from June 2018 to June 2021, brought up to date July 2021

Apart from the above general credit since 2018 is good with no missed payments and a few credit cards paid in full each month.

Thanks

Dapand

Hi could anyone please advise if this rate is too high?

Our broker has come back with Interest rate of 5.8%.

Our situation is as follows.

Myself:
- self employed sole trader decorator since 2018
- 2020-2021 profits after expenses £25k
- 2021-2022 profits after expenses £35k
- 2 defaults (vodafone £500 sep 2018  settled March 2021, virgin media £30 Nov 2017 settled June 2019)
-n power account in arrears for one year but settled early 2021

Partner:
- full time employed £22k per year & £3k child benefit
-1 default BT September 2018 £1374 settled March 2021
-2 ccj (Aug 2017 £450 settled April 2020) & (July 2018 £376 settled July 2019)
- seven trent water arrears from June 2018 to June 2021, brought up to date July 2021

Apart from the above general credit since 2018 is good with no missed payments and a few credit cards paid in full each month.

Thanks

macman

I think the question to ask is whether you can afford to service the mortgage at that rate? How long is it fixed for?
One of those CCJ's will drop off in a year, but of course rates are likely to rise further by then, though prices may not.

Dapand

Thanks for your reply. That was a 5 year fix as he said they wouldn't offer a 2  year fix which I would've preferred. Yes we could afford it but want a second opinion on wether we are likely to get a better rate as this is the first and only broker we have approached. 

deannagone

You might possibly get more specialist advice here https://forums.moneysavingexpert.com/categories/mortgages-endowments, quite a few brokers advise in that part of the forum.  Hope it helps.

Dapand

Thank you @deannagone

The_Fat_Controller

@Dapand your topic title says 5.6 and the body says 5.8, which is correct ?

CLJ2986

I'm not sure on the adverse situation and how much that affects your application,  but we had a specialist adverse lender last year and we pay 4.7 ish currently so considering rate rises I would say that's about right if you need an adverse lender.  Weirdly last year no high Street would touch us,  one year later I have a high Street offer.  

Dapand

@CLJ2986 thank you. Has your credit situation now changed then and how do you know they have offered. Didn't you get a fixed deal last year at 4.7? Cheers

Dapand

@The_Fat_Controller thanks.

It should be 5.8 I've changed it now. However its the first number I'm concerned about 😅

CLJ2986

Yeah we are in a two year fix,  I applied to reemortage early,  the rising interest rates are slightly scary!  Wasn't hopeful considering a year ago it was a no,  but got offered a lower interest rate and even with the ERC it saves me money every month.  So going ahead into a five year fix! And yes my credit has improved vastly.  No missed payments in 3 years now,  last payday loan was about that long ago and I've settled a lot of accounts.