Chances of getting a mortgage - previous bad credit

JadeAlex26

Hello, my partner and I are hoping to buy a home very soon, we have an appointment with a financial advisor next week.

So we'll be after a relatively small mortgage, in the grand scheme of things. Likely around 80-90k. House is being valued asap, others on the street sold for £65-85k in 2019 and 2020 so I'm assuming it'll be a little more than that?

I earn just under £28k, my partner around £18-19k. No credit cards or loans, but we both have one finance payment ongoing. No missed payments

The things I'm worried about are the fact that I had a few payday loans around 2018 due to a situation with my ex partner. This resulted in defaults on my record around 2019. All debts are completely paid now though, nothing outstanding at all

And my partner has an overdraft he regularly used, so not sure whether that'll have a huge impact too

Just wondering if we're likely to get approved at all with my defaults just to add, it was just defaults, no CCJs or anything like that

Edit to add, not sure if relevant but it'll be a private sale, the current owner is a family friend, no ongoing chain or anything and house won't be put on the market if we can have it 

RedFraggle

What deposit do you have available? 

JadeAlex26

RedFraggle said:

What deposit do you have available? 

£10k, £6k is mine and family are gifting the additional £4k

ACG

Its hit and miss, it will depend on the number of defaults, the values etc. 
There probably will be lenders, you might worst case scenario need a 15% deposit. 

See what the mortgage broker comes back. Its possible, but its not a given. 

ACG

Sorry, just to add as I think my last answer was wrong. 
You should be able to get a mortgage, but the rates are going to be horrible (8%ish. 
If you want one at normal rates then the above applies. 

JadeAlex26

ACG said:

Sorry, just to add as I think my last answer was wrong. 
You should be able to get a mortgage, but the rates are going to be horrible (8%ish. 
If you want one at normal rates then the above applies. 

Thanks for your help. 

When you say it could be possible, but on a horrible interest rate, does that mean it will *always* be a bad rate, or am I right in thinking we could remortgage after the initial period and get a better deal in a few years after my defaults etc drop off?

This is all new to me so trying to get my head around understanding all the details!

ACG

I think:
Worst case scenario is a horrible rate for a couple of years and then get it on to something more mainstream. 
Best case scenario would be normal/near normal rates now. 

The devil is in the detail. You just need someone to go through the reports really. 

JadeAlex26

ACG said:

I think:
Worst case scenario is a horrible rate for a couple of years and then get it on to something more mainstream. 
Best case scenario would be normal/near normal rates now. 

The devil is in the detail. You just need someone to go through the reports really. 

Awesome, thank you!

On the bright side, I used a (potentially inaccurate, I know) calculator on some estimated mortgages and even at 8% on £90k we'd still pay less than what we pay on rent right now! 

ACG

I use the BBC mortgage calculator if I dont have our software open. Its normally £5-10 a month out but its easy and gives you a good ball park.