First time buyer - percentage share ownership with not so good credit rating

ryanftb

Good morning all,
I'm currently looking to buy a flat on the percentage ownership schemes for first time buyers, i've got my morgage illustration and almost ready to move onto the next steps.

I have however a number of problems, the first is my credit history, when i was younger i screwed up some, I've currently got:

- 1 CCJ 1500 (paid this month)
- 1 CCJ 600

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- 1 over limit credit card by 500 (2.2k limit)
- 1 defaulted credit card (1300)
- 1 other thing on that but it's the 1500 CCJ above (paid this month)

I'm going to be killing of the other CCJ next week, followed by removing the over limit on the credit card to finally then nock off the £1300 on the defaulted credit card.

The second CCJ there will follow onto a loan mounting to 6k but to be honest I could prolly offer them 4.5k to clear it as they've offered in past 5k to clear.

So the problems above are obviously quite nasty and will certainly not allow me to get a morgage with them still there, so I've formulated a plan to kill them off.

Moving onto to my next problem....

I've been self employed for the past 3 years (freelancing for the pass 6 years) it's only been in the past year or so that I've managed to move my self into a position where the work load is sufficient and comfortable to cover a morgage + all my bills and live comfortably, in the past 6 months is where things have really begun to kick off.

Now banks don't look to fondly of self employed people, I've put my self up as being on 15k to afford the morgage (so that it's a worse case scenario whereby I can do any job regardless + the odd freelance job to suffice the costs)

The morgage amount I need is 50k on a 35% share mounting to 130 - 145k flat.

The biggest problem at the moment is the house prices are so high right now, that it's impossible to obtain a morgage on a house, so the flat is the only real feasable option, and as it's a new build there shouldnt be any problems and should be a nice investment with such a lower end morgage amount that will help me get onto the property market and once my business thrives even more I can then move onto a better place.

Is there any advice that you guys could fire at me? I don't want to apply for a morgage before I have the CCJ's at the very least nocked off above, but I'm also not too confident that I would be able to get a morgage without the rest of it being taken off either.

Renting here will cost me almost the exact same (-/+ £20 - £40 per month difference) as my monthly outgoings on the morgage + rent (rent of the remaining percentage), along side this I need to move out of my current rented place at the end of this month, which really put's the pressure on to sort this out and move into some temporary accommodation untill it fullfills.

Any help/advice is appreciated, I've got my credit rating which is currently poor according to experian and experian have noted that with removing the CCJ's my rating will move upto the highier end of good.

lindens

To be honest, I think you may struggle.

1. The market seems to be saturated with flats, I wouldn't buy one.
2. Buying a new build at the moment will not be a good investment as new builds tend to lose a bit of money anyway (same as buying a brand new car) and the market is on the downturn so unless you manage to knock them right down on price, its a loser.
3. You're self employed and a big risk in the current market with lenders very nervous.
4. You dont have a squeeky clean credit record so same as number 3.

I would just rent for the next few years if I was in your position

dan1979

There's a lender called Preferred Mortgages that should be able to accomodate you, they won't actually care whether the CCJ's are paid off or not.

Unfortunately the rates are very high (around 9.4% and you can't apply direct to them.

ryanftb

Would renting really make financial sense through? I mean a 50k morgage + the side rent on that is about 400 - 500 a month, renting some really small and crummy flat is bare minmum 400, something even remotely bleh is 450, something decent is in the 500's if not lower 600's.

Running that against the same if not less that isn't being thrown down the toilet and is going somewhere and paying something off?

The self employed side of things I'm applying as being on 15k a year, which is a very low amount and obtainable by doing anything, in reality i'm on more than that but i'm trying to budget my self to be on less and putting the left over in as a cushion / overpayment on the morgage (or using it to buy more % of the flat).

The new build i'm buying is currently running at 135 - 145k, same sq foot / layout (baring one feature) is selling for 30 - 40k more a few doors down, as it's currently being sold through the association for first time buyers there selling them for less.

Still a bad investment/move? I really hate throwing money down the drain on renting, it's depressing.

ryanftb

dan1979 wrote: »

There's a lender called Preferred Mortgages that should be able to accomodate you, they won't actually care whether the CCJ's are paid off or not.

Unfortunately the rates are very high (around 9.4% and you can't apply direct to them.

Anyway of finding out more? looking at www.preferredmortgages.com seems to be a business to business (internal) company as you say. It is very very high through but might be worth while perhaps untill my credit rating is enough to move it else where?.

dan1979

As far as I know Preferred are the only ones doing sub-prime shared ownership mortgages currently.

Unfortunately CCJ's paid or not will count against you for a very long time and that limits you to sub-prime.

ryanftb

dan1979 wrote: »

As far as I know Preferred are the only ones doing sub-prime shared ownership mortgages currently.

Unfortunately CCJ's paid or not will count against you for a very long time and that limits you to sub-prime.

I was told by experian that once they were paid and i had a certificate of satisfaction that it wouldn't make much effect (would still effect, but only marginally) ?

dan1979

Experian collect data, they don't work in the mortgage industry.

The CCJ satisfied will be fine with most sub-prime lenders but it will rule you out of prime lenders who, if they have any limit at all on CCJ's it will be for very low amounts like <£250 in the last two years.

ryanftb

I'm talking to halifax at the moment in a chatbox, they've told me that with a CCJ in the pass 12 months it's very unlikely i'd pass the credit check even if they have certificates of satisfactions, I'd imagine the other main morgage places that don't have obsene rates will follow suite here =(

They've also said that if i did check to see if i could obtain it (not apply, in there words "if you dont pass you cant apply") then it would leave a foot print that lasts a week if its just credit search for the promise.

Is this true? every where i've read says it lasts for a long time and has to be requested to be removed and removing it can take some time and even then theres a low chance of it being removed?

ryanftb

Oh also, what kind of companies are you thinking of when you mention sub-prime? the 9.4% preffered mortgages ones?

lindens

Have you seen a fee-free whole of market financial advisor? Thats the best place to start IMO