Adverse credit mortgage lender / broker

stanwah

Hi, 

I am currently in a DMP plan which has been running for 2.5 years.

I am currently renting but having been given notice on my current rental property, would like to explore the option of buying. 

I have already spoken to a mortgage broker who advised that my situation is not his speciality but that there are "Adverse credit" mortgage lenders and brokers that would be better placed to assist.

I have already done some searches and approached a few however I would welcome if anyone could recommend a broker from personal experience that might be able to assist.

On another note, I would be looking to put down a fairly large % deposit (40-50%) and it has been mooted as to whether I could include / pay off my DMP debt within that mortgage amount. 

I appreciate the above suggestion would not positively affect my credit rating in the short to medium term.

Any suggestions / feedback would be greatly appreciated. 

Thanks in advance.

ACG

You should have options. I dont think you will need an adverse lender, I reckon there would be a quirky little building society somewhere that would do it cheaper than an adverse lender. 

40-50% deposit is more than enough, if you had a 10% deposit I think there are lenders under 6% available so would like to think you would be much closer to 5% although in all honesty whilst I do do a lot of adverse, not many of our customers have a deposit as big as yours so its not something I have had to research in a while. 

Fair play to the original broker though being completely upfront with you. Not many would be that honest. 

Although I cant recommend brokers/lenders, I think its important that if you speak to a broker who is recommending products with adverse lenders, it might be worth looking a little more (although I am only basing that on what you have said, without seeing your credit report). 

stanwah

Thanks ACG

The original broker has sent me a spreadsheet of lenders, that details who will and wont accept DMPs along with a raft of other criteria which I am working my way through however I was hoping a broker would hopefully be able to give a broad overview of all of the options. 

On another note, if I chose to reduce my deposit amount to say £100,000 do you think that would inhibit my options? 

ACG

stanwah said:

Thanks ACG

The original broker has sent me a spreadsheet of lenders, that details who will and wont accept DMPs along with a raft of other criteria which I am working my way through however I was hoping a broker would hopefully be able to give a broad overview of all of the options. 

On another note, if I chose to reduce my deposit amount to say £100,000 do you think that would inhibit my options? 

Really? That feels like you are doing your own research. The idea of a broker is to cut through all the waffle and say "here you go, heres the best deal for you." Not heres a list of lenders where it fits. Because even where DMPs are accepted, there is additional criteria - has it been run for a year or 2 years? Has it been paid on time every month? Do any associated defaults fit criteria etc. There is more to it than "do you accept DMPs". 

With regards to the deposit, it sort of depends. If you reduce your deposit by £100k and it takes you from 50% LTV to 90% then yes its going to be a problem (not necessarily a deal breaker, but it will limit your options), if it takes you 60% LTV it likely wont make any odds. Presumably it will fall somewhere in between those 2 so it just depends where. Chances are if you stay under 70-75% you should be fine. If you go above that you might see your options drop or rates increase at the various LTV bandings. 

stanwah

Hi ACG. 

Once again thanks for the response. 

Just to clarify the spreadsheet was provided by the original broker, who admitted that it was his specialism and directed me elsewhere. 

I've since engaged with London & Country, who have provided me with an agreement in principle and are currently in the process of trying to secure a me formal agreement.

I've reduced my deposit to a 23% LTV which doesn't appear to be an issue at this stage (time will tell), so fingers crossed.

Thanks again for your insight. 

ACG

Under 60% LTV nothing will change.

Just check the rates, if they come back over 6%, I think they will be using an adverse lender which is likely going to be like using  hammer to crack a nut and you can probably do better.