5.8% interest rate for adverse credit??

CLJ2986

Dapand said:

@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

Also just to clarify,  I never had ccjs or defaults just a couple of late/missed payments where I went into agreements with the creditors directly to clear the arrears and obviously the payday loans.  My partners credit was absolutely fine. 

Dapand

@CLJ2986 well maybe in the grand scheme of  things with the adverse credit and rising interest rates then its about right. There was another lender who would lend at a better rate if partner default was either under £500 or over that amount but settled at least 2 years. So as hers was £1374 and aettked 17 months ago we would need to wait another 5 months to be eligible. Our broker did not tell us that rate just the monthly payments which were around £200 cheaper than the 5.8% rate.

Thanks for the feedback and well done on securing the lower rate so early in to your mortgage journey, its reassuring to hear ypur story. We will be there one day 🙂

MovingForwards

It's only slightly higher than I'm paying.

Just over 2 years ago I purchased my home, with a higher value settled old CCJ, couple of settled old defaults, AP marker on a payday loan (previously settled but stays on for 6 years afterwards) and I'd been in a DMP (also paid and settled).

The view I took was a sub-prime mortgage isn't forever and get me a home.

As it stands now I could remortgage to a mainstream lender and pay ERCs as the only 'blip' on one of my credit reports is evidence of a PDL but no information; it was removed on the others when the company when into administration. The defaults and CCJ were old and have naturally fallen off.

With some mainstream lenders they're more relaxed with issues after they hit the 3 year mark. You could try another broker, see what they come back with, or wait to see what the resident brokers say.

ACG

Adverse rates (like all rates) have gone up by around 2% in the last 6 months or so. 
You have not told us what the LTV is or the purchase price and deposit. If you are at 80-85% (ie £80,000/£85,000 on a £100,000 purchase price) it looks there or there abouts with an adverse lender. If you are 75% then its probably possible to get a bit off. 

Its tricky as you are in one of those positions where your adverse is not major, but your adverse is covering a 5 year period of a 6 year credit report. If your broker has gone straight to an adverse lender, I would probably try another broker to get a second opinion as you are could be borderline. 

However, if you do have to go to an adverse lender, then it is probably not a million miles out. There might be some possibility to get it down, but I dont think massively and by the time you go back and forth you could find rates have gone up again anyway in the current climate. 

CLJ2986

Dapand said:

@CLJ2986 well maybe in the grand scheme of  things with the adverse credit and rising interest rates then its about right. There was another lender who would lend at a better rate if partner default was either under £500 or over that amount but settled at least 2 years. So as hers was £1374 and aettked 17 months ago we would need to wait another 5 months to be eligible. Our broker did not tell us that rate just the monthly payments which were around £200 cheaper than the 5.8% rate.

Thanks for the feedback and well done on securing the lower rate so early in to your mortgage journey, its reassuring to hear ypur story. We will be there one day 🙂

Who's the lender?  I had been planning to product switch with my own but the rates are now higher than my current rate and we can't afford much more than that right now.  Mine is with Aldermore. 

Dapand

MovingForwards said:

It's only slightly higher than I'm paying.

Just over 2 years ago I purchased my home, with a higher value settled old CCJ, couple of settled old defaults, AP marker on a payday loan (previously settled but stays on for 6 years afterwards) and I'd been in a DMP (also paid and settled).

The view I took was a sub-prime mortgage isn't forever and get me a home.

As it stands now I could remortgage to a mainstream lender and pay ERCs as the only 'blip' on one of my credit reports is evidence of a PDL but no information; it was removed on the others when the company when into administration. The defaults and CCJ were old and have naturally fallen off.

With some mainstream lenders they're more relaxed with issues after they hit the 3 year mark. You could try another broker, see what they come back with, or wait to see what the resident brokers say.

@MovingForwards thanks alot for taking the time to reply, makes us feel a bit more confident that the rate we have is as a result of our past credit problems and current market situation, I take the same view as you that it's a short term solution to get on the ladder and can improve things In a few years time. 

Dapand

@ACG thanks for the reply. 

LTV is 90%. Purchase price approx £270k region with 27k deposit. So borrowing around 250k.

Totally understand what you are saying and also regarding back and forth situation. Just wanted to make sure we not paying an extra percent or so as that really does make all the difference. Suppose this is a consequence of being fools in the past amd will be another few years before we are blemish free.

Dapand

@CLJ2986

Don't quote me on this but if my memory serves me right the 5.8% was from Metro and the one offering lower rate if the default was settled at least 2 years ago if over £500 was Kensington.

Alot of the time when going through lenders criteria our broker would say I'm not going to mention the name as you wouldn't of heard of them.....🙄

ACG

I think 5.8% is reasonable. 
There is a possibility of high street, but when I look at applications I always try to weigh up the pros and cons. 

Saved deposit, 2x income, good stable job and address history is going to look better than 4.5x income, gifted deposit and a new job. You have satisfied your adverse, a lot of people do not or if they do, it is done a month or 2 before applying for the mortgage. 

The devil is in the detail. I dont want to sit here and say you are going to get high street rates, but I dont want to rule it out either. I think if I was a betting man I would say probably not but without seeing everything its difficult to say. It does not seem like a completely wrong recommendation. 

Sarah1Mitty2

The rate sounds pretty reasonable in the circumstances?