Joint Mortgage, she has very good credit history and I have a poor credit history!

kgp100

Hey this is my first post so hope this is in the right place etc.

I currently live with my girlfriend who owns a flat and I have been paying her half the mortgage, however we are about to buy a new house together. She is tied into her mortgage for another year or so but we are allowed to buy another house with out getting charged the £4000 penalty! We will probably borrow a little bit more to buy the new house so I guess that will be a added to the existing mortgage. The current mortgage is for 85% (£140k mortgage on total £165k). We want to spend about ~ 200k on the next house with ~ 165k mortgage so about a 17% deposit.

The problem is that I want to be named on the current mortgage but have a poor credit history while she is a Doctor with a perfect history. My questions are;

Is it likely that I would be allowed to go onto the current mortgage (Halifax say it fine but do not know about my credit history)?

She can probably get the increase on her own, would it affect this if I am named on the mortgage?

Would my "bad" credit ruin her "perfect" credit history?

Would love to know any ones opinion on this. Thank you

Conrad

No your adverse credit wont affect her personal rating particularly. The nature and extent of your adverse credit may mean a joint application is declined.

Being named on a mortgage means a lender has to accept the risk you represent to them, in terms of how likely you are to default given past history. The fact your partner has good credit carries far less weight, as lenders determine risk and pricing on the applicant with the lowest rating. The reason they do this is that past experience reveals those with a propensity to pay late have a disproportionate effect/influence on a joint mortgage being sustained or otherwise.

Bets of luck - you will never know until you apply though.

birduk

Just the type of question I wanted to ask too. Thanks for the advice.

So theoretically if my OH had a terrible rating (and did not earn very much), I should take a mortgage out in my own name (and much better salary), rather than going halves. If this were the case, could I had their name later on after the mortgage commences?

kgp100

Thank you for your reply really useful, I guess its good that my history wont rub off on her! If we go in and try and get it together and then fail due to me, can she then try on her own or will the fact the they now know that I am evolved stop her from trying?

Conrad

Bird your question 'can I be added later' comes up all the time.

You cannot add a name unless that persons risk profile matches that which is acceptable to the lender. Lenders fear a late payer will have a considerable influence on a joint contract in terms of paying late. You might argue this wont happen but that wont count for anything - all that counts is the history of the applicant.

Imagine you leant me £10,000, but for security you 'held' a watch I owned worth £12,000 as your security in case I dont pay you back the £10,000.
Now imagine a month later I ask you to add redo the loan paperwork to include my brother - but you find out my brother has some history of not paying up / not keeping to agreements.

Can you see that all of a sudden the risk of default is much higher and note lenders cannot repossess on a whim they must have leant RESPONSIBLY in the first place.

birduk

Conrad wrote: »

... lenders cannot repossess on a whim they must have leant RESPONSIBLY in the first place.

You were doing so well up until that point.... :rotfl: 110% mortgages anyone? Oh how I wish that in the last few years all lenders had been responsible! Then maybe I could 'afford' a house (not not be lent/leant the money for a house!).

I see your point though, but at the end of the day, is it not better to have an extra person responsible for a loan, you can then chase them both if they fail to pay.

Next question (sorry for stealing the thread). What if we were to get married then?

kgp100

That fine birduk steal away! I would like to know what effect marriage would have too and saves me getting in trouble if the OH see this thread. Apparently I am not allowed to ask her for financial reason!!

birduk

Cough! Bump! Cough!

Does anyone know about marriage? Please?

COOKIEWILLOW

birduk wrote: »

Cough! Bump! Cough!

Does anyone know about marriage? Please?

yep. dont bother!!:rolleyes:

luckyfool

birduk wrote: »

Cough! Bump! Cough!

Does anyone know about marriage? Please?

You can apply for it in your own sole name, that shouldn't be a problem, especially if you have not applied for joint financial products in the past.

Adding him on is likely to prove problematic in the future as the mortgage lender will still want to credit search him when he gets added so you face the same problem. Having said that you could speak to a solicitor as if the funds for the purchase came from joint assets, and you get married, then I'm not sure that it matters much whose name the house is in as he would still have rights.