advice on mortgage app with past credit problem

sammy70 · 8 May 2013 at 9:23PM

hi, has anyone got advice for my partner and myself, heres the facts-
My partner, soon to be hubby and i are wanting to to buy a house together, but he has past credit problems.
Basically, he divorced in 2010, and was left with all marital debt, 45k, his ex wife and new partner kept the marital home, on the agreement that the mortgage was paid on time and when they were in a position to, his ex and her new partner would re-mortgage in their name and my partner would be removed.

As my partner was at the time struggling to manage as he was paying all the debt alone aswell as a large ammount in maintainence,and at the time half of the marital mortgage, he asked for advice from the then CCCS, now Step change, and was advised to enter a debt management plan, which he did, and an amount of £950 a month was agreed, which he stuck with. While it was all being set up, two of the credit card/ loan companies registered defaults.

He met me, and we both did overtime, used savings, reclaimed his ppi, and worked damn hard for last 18 months and completely settled all the 45k debts , he came off the debt management May last year, and the last debt was paid September 2012.

Unfortunately his ex had carried on as she did when he was with her, continued running up her debts, and decided to have a few exotic hols , get married abroad, instead of paying the mortgage. last year after the missed mortgage payments got to 5 months, my partner was forced to take legal action to force the sale of the property, as she refused to bring the mortgage up to date, he tried every avenue, but his ex and new hubby just couldnt see why they should pay the mortgage on time, and had no intention of remortgaging together, and after they had missed so many payments it wouldnt have been an option anyway.

The sale was forced by the court, and completed in February 2013.

So now we are saving £1200 a month for a deposit on a new house, we currently live in a property i own, worth £95-£100k with an outstanding mortgage of £42k.
We earn £55k jointly, and have no debt at all.

My query is, due to all the above factors, what timescale are we looking until its worth applying for a mortgage? i know its not going to be soon, and also what steps should my partner take to improve his credit rating?
Is it better to keep our accounts seperate, or would adding to my accounts improve his situation, or make my credit rating poor?

sorry for the long post! hope someone can advise or help , any constructive advice welcome, thank you!

ACG · 8 May 2013 at 10:11PM

i will be honest in that i have never had to look into a situation like this before, however in yoru favour are good incomes and your good history, i suppose there is also an ok reason for the issues.

I would say work towards a 25% deposit and speak to a broker let them do some research with regards to timescales. Part of me thinks, its not really his fault as she reneged on an agreement so it may be possible to do straight away but then part of me thinks lenders might want to see a little bit longer between issues and agreeing a mortgage to ensure its not his fault.

sammy70 · 9 May 2013 at 8:20PM

thanks for the advice, to be honest as the mortgage was in joint names with him and his ex, even though she didnt keep to the agreement, we expected that it would still just look to a potential lender that it was a joint mortgage, so both are responsible for the missed payments, even though it was agreed that she kept house and payments up to date until in a position to remortgage with her new hubby.
We are looking to buy a property around £250k, we already have £50k equity in my property, and 5k saved already,and should have at least another £10k saved by xmas. We are hoping spring 2014 to be in a position to put my property on market as long as we could obtain a joint mortgage.
Does anyone know if adding my partner to my current accounts and savings would improve his credit rating? Both our wages are at the minute paid into my Halifax current account, we pool all cash, pay bills, have a small ammount each for spends, rest goes into savings for new house (hopefully).

ACG · 9 May 2013 at 8:48PM

They may not allow him to be added.

Another option could be porting your existing mortgage and asking for a top up if your income alone supports it.

Maybe look at getting a credit card to use and spend for the next year and improve his score? But hopefully with a bit of time and a 30% plus deposit there will be a few lenders prepared to look at you - probably no high street lenders though so this will most likely be one for a broker.

sammy70 · 9 May 2013 at 8:58PM

thanks, you have confirmed what we thought, we thought about him getting a credit card specifically to rebuild his credit history.

it looks like we will just have to continue our saving and leave it untill 2014 to start looking to make enquiries with a broker, and in the mean time we will sort the c.card to try and rebuild his credit history.

Thank you for the advice, we really appreciate it

Thrugelmir · 9 May 2013 at 10:11PM

sammy70 wrote: »

it looks like we will just have to continue our saving and leave it until 2014 to start looking to make enquiries with a broker, and in the mean time we will sort the c.card to try and rebuild his credit history.

In situations such as this. Time is the real healer. Combined with a squeaky clean credit record.

Take the opportunity to repay your mortgage / build your savings in the mean time. As the lower the eventual mortgage you apply for the easier it will become.

The past is best forgotten and just look forward to the future.

Dave_Ham · 10 May 2013 at 8:22AM

Phew, what a few years you have both had!

With your deposit and assumed strong credit file, there will be options on Spring 2014 for sure.

Dependent upon the actual credit files and the broker involved (you will need one) there may be options now.

You would need his Experian, Equifax and Call Credit files now or next Spring before you speak with any decent broker though..

Ensure he is on the electoral roll now, get a credit re-build card from Aqua, Vanquis, Capital One etc. and do not try and add him to your accounts as this is unlikely to be accepted and will perform another search.

Good luck

sammy70 · 10 May 2013 at 7:44PM

thanks for the advice folks.

We have applied for him the capital one card for rebuilding credit, he has been on the electoral roll here since April 2012.

The defaults on his file are well over a year ago, and all his credit shows as settled on equifax.

The only thing im worried about is the fact that his joint mortgage with his ex wife was only settled February 2013 ,following him having to force the sale after his ex and her new hubby didnt pay it, and it was 5 months in arrears, even though it wasnt down to him any potential new lender only has his word for it, and it will go against him..

dld2s · 11 May 2013 at 9:35AM

There are some specialist brokers and lenders out there who deal with mortgages to folkwith defaults, but you do have to jump through a lot of hoops and are still not always succesful

Thrugelmir · 11 May 2013 at 2:10PM

sammy70 wrote: »

even though it wasnt down to him any potential new lender only has his word for it, and it will go against him..

Liability is contractual. Lenders aren't interested in borrowers own arrangements. They merely look for repayment of the money owed.

sammy70 · 11 May 2013 at 4:34PM

thats the problem, i guess we will just have to wait a while, i reckon a year at least, let them see all payments on time etc..
He did try every option to resolve the mortgage issue all to no avail.. his ex wouldnt pay, she wouldnt move out, the only option was either force sale, or pay the mortgage himself while she and her hubby lived in the house.
he had signed as part of the clean break order that she had all proceeds of sale of property, so this wasnt really an option, she would never had moved then , and we would have been paying the mortgage with no prospect of even getting a cut of the sale proceeds in the future..
Oh well, thats in the past,we will carry on saving, and next year we will approach a broker with enquiries..

advice on mortgage app with past credit problem

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