Chances of getting a mortgage with 5 year CCJ and 2x 2 year old defaults

thegoodstuff1

Hi everyone, sorry in advance for this to be so long winded.

I just wondered if anyone had got a mortgage in a similar situation to what I’m in.

I have 1x 5 year old ccj and 2x 2 year old defaults. I have no missed payments in 4 years. Those defaults were double defaults were older but were added again later when the debt was sold which I have found out is actually allowed.

I have 20k debt resulting from bad management of money from the 10 years up to 2017. These debts are with debt collection agencies now which I pay monthly payments.

I have 20k deposit for a mortgage. I know some people would say pay the debt off and start again but that is not my priority as I have a baby on the way and I am living at parents now.

I am looking to secure the mortgage with my foreign spouse if that’s possible she’s on 18k a year and I’m on 37k a year. I can also have my father be a guarantor who owns a paid of house worth around 140k.

if any one has any advice of likelihood of securing a mortgage please feel free to give your thoughts.

also my outgoings are minimal no credit other than what I owe on the old debt which I pay 200 a month overall( I am not in any payment schemes /Iva) etc

thanks

pete

thegoodstuff1

I’m looking to secure a 150k mortgage 

MorningcoffeeIV

If you're still struggling to clear previous debts even while living with parents, you're going to find it virtually impossible to get a lender believe you'll be able to afford a mortgage.

How long will it take you to clear the debts?

thegoodstuff1

9-10 years as it stands 

Annisele

With £20k of debt and £20k of deposit, you've effectively borrowed the whole of your deposit. That in itself would make it extremely difficult to get a mortgage, even if your credit was perfect.

What's the visa situation with your spouse? The fact that she's foreign isn't necessarily an issue, but if her visa was due to expire next week that'd be a serious issue.

I think it's extraordinarily unlikely you're going to get a mortgage in your circumstances. You may not have a formal IVA, but the fact your debts are with collection agencies suggests you're not making the full contractual payment. From a lender's perspective, you could afford to repay your entire debts (because you have £20k in cash), but you've chosen not to. I can see why your priorties are getting a roof over your child's head - and I don't say you're necessarily wrong to keep some savings (though £20k is a lot) - but a lender's priority is that the lender gets paid. And you've shown that that isn't your priority.

The other thing is that if you can get a mortgage at all, the rates are likely to be absolutely eye watering.

ACG

What you want might be possible (although it may need to be a single application). 
Rate wise, I have no idea in the current climate, it seems to be up and down but I would say your probably looking at 6.5% at a minimum, but probably 7% plus. 

thegoodstuff1

Thanks for your comment. I’m hoping the help of a guarantor will push it over the line

Sea_Shell

thegoodstuff1 said:

Thanks for your comment. I’m hoping the help of a guarantor will push it over the line

Does your father realise that his house could be put at risk by being guarantor?

You might promise not to default, but 💩 sometimes happens.

Would he be going into it with his eyes wide open?

Same applies to being a rental guarantor too.

Unless he has plenty of ready cash to pay up with instead.

ACG

thegoodstuff1 said:

Thanks for your comment. I’m hoping the help of a guarantor will push it over the line

A guarantor probably wont help. Its not like with a loan where a guarantor helps you overcome the adverse, with mortgages guarantors are more to help with affordability. 

It will likely need to be done without the guarantor. 

thegoodstuff1

Hi, yeh fully aware of what been a guarantor would mean

MalMonroe

thegoodstuff1 said:

Hi everyone, sorry in advance for this to be so long winded.

I just wondered if anyone had got a mortgage in a similar situation to what I’m in.

I have 1x 5 year old ccj and 2x 2 year old defaults. I have no missed payments in 4 years. Those defaults were double defaults were older but were added again later when the debt was sold which I have found out is actually allowed.

I have 20k debt resulting from bad management of money from the 10 years up to 2017. These debts are with debt collection agencies now which I pay monthly payments.

I have 20k deposit for a mortgage. I know some people would say pay the debt off and start again but that is not my priority as I have a baby on the way and I am living at parents now.

I am looking to secure the mortgage with my foreign spouse if that’s possible she’s on 18k a year and I’m on 37k a year. I can also have my father be a guarantor who owns a paid of house worth around 140k.

if any one has any advice of likelihood of securing a mortgage please feel free to give your thoughts.

also my outgoings are minimal no credit other than what I owe on the old debt which I pay 200 a month overall( I am not in any payment schemes /Iva) etc

thanks

pete

Hi, I think it might be worth your while speaking to a mortgage broker. They can advise you of your chances and help you to find a suitable mortgage. Even if you have to pay for the advice, it can save money in the long run.

There's also some recent information from this very site in the following link, written by Martin himself -

https://www.moneysavingexpert.com/mortgages/mortgage-guide/

I think it's really helpful and very comprehensive.

I don't think that having your father as a guarantor is a good idea at all, especially as it appears that he isn't in debt himself at the moment. If he does decide to go ahead, he will need to prove that his own financial circumstances are strong and that he would be in a position to pay the whole of your mortgage should you default. Something I don't think anyone should ask parents to do.

You could contact one of the free debt help agencies for some advice - StepChange, Citizens Advice or National Debtline. No obligation, non-judgemental, friendly advice. 

You say your outgoings are minimal and I think your joint income is very good, so if you could increase your payments to get rid of the debts sooner than your predicted 10 years, that might be a good idea and will also prove to lenders that you are serious about paying your way and that you would be able to manage a mortgage comfortably. Lenders just want to know that their borrowers are responsible and reliable.

As above, though, I think a really good first step would be a chat with a mortgage broker.