Do we need an adverse mortgage?

BraLo · 21 July 2018 at 4:13PM

Hello

I was hoping for some advice.

My partner and I are in a joint DMP, it is £68 per month and is over 6 years old. All of the people we deal with have been great and we have always paid on time.

As it is over 6 years old, there is no record of it on my file. As such my credit report with all three agencies shows as excellent. I have had no further defaults or missed payments. I have one credit card with a £400 limit. The only reason I took the card was to build my credit history. I buy a monthly shop on it and then pay it off straight away.

My partner is much the same bar a CCJ for water rates. This happened due to us moving house and not being able to prove the month we had moved into the previous address. I had thrown out our tenancy agreement as we’d been in the new house for 2 years. The first we heard about it was a court summons. Regardless, his credit file shows no defaults, just the CCJ. He has no credit at all, not even a mobile phone contract or overdraft.

We have £9000 from the passing of a relative and would love to buy a house.

Do we have a chance of a 95% LTV mortgage with anyone?

Our joint income is approx £45000 and we have 2 children.

ACG · 21 July 2018 at 4:43PM

You do not say when the CCJ was issue, how much for and whether it has been satisfied or not.

Chances are you are not going to get a 95% Mortgage on the high street. If it was 75% and the CCJ had been satisfied then there is a decent chance but high LTV, DMP (which will likely need to be declared if asked), no saved deposit, CCJ then it is probably going to be too much at 95%.

Thrugelmir · 21 July 2018 at 5:54PM

BraLo wrote: »

My partner and I are in a joint DMP, it is £68 per month and is over 6 years old. All of the people we deal with have been great and we have always paid on time.

More importantly how much do still owe to your creditors? Will be in your interests to clear the DMP as soon as practically possible. While it might have disappeared off your credit file. The lenders you defaulted on aren't going to have forgotten. Their internal records will continue to register your past default.

BraLo · 22 July 2018 at 8:08AM

ACG wrote: »

You do not say when the CCJ was issue, how much for and whether it has been satisfied or not.
.

Apologies. It was in February 2016. It would be be 3 years old by the time we apply. It was for around 200-300 and was settled in 2016.

Do you think we’d have a chance with an adverse lender at 95%? I’m willing to do that at any cost really because we’ve paid almost £120000 in rent over the past 13 years! I’d take the hit for three years if needed.

Or a high street lender at 75% using help to buy?

Sorry for all the questions, just trying to look at any realistic options.

BraLo · 22 July 2018 at 8:11AM

ACG wrote: »

If it was 75% and the CCJ had been satisfied then there is a decent chance but high LTV, DMP (which will likely need to be declared if asked), no saved deposit.

Sorry, I didn’t mention we have saved £3000 ourselves in addition to the £9000. I just meant we had £9000 for the deposit, I had considered the £3000 separate for any fees.

BraLo · 22 July 2018 at 8:17AM

Thrugelmir wrote: »

More importantly how much do still owe to your creditors? Will be in your interests to clear the DMP as soon as practically possible.

We owe £12000 on the DMP.

To be honest we would have prioritised the DMP if a potential move wouldn’t save us so much money. We would be set to save £400-500 a month on rent/council tax/utilities by moving. This would easily offset the cost of an adverse mortgage and allow us to pay back the DMP within about 3 years. Without moving, the DMP will run for another 12 years (ish). We don’t want that hanging over our heads.

ACG · 22 July 2018 at 9:27AM

I dont think that will be enough to overcome the issues to get you on the high street.

csgohan4 · 22 July 2018 at 9:32AM

that's a large DMP, I'm afraid that will always be hanging around your Neck until you clear it and lender's won't like it especially for a 95% mortgage.

hit the debt free wannabee forums to hit that debt and continue to save, buying a house has significant overheads for maintenance that transcends the 'it's cheaper than rent' argument.

BraLo · 22 July 2018 at 11:16AM

ACG wrote: »

I dont think that will be enough to overcome the issues to get you on the high street.

Do you think we’d get 95% from an adverse lender?

BraLo · 22 July 2018 at 11:23AM

csgohan4 wrote: »

hit the debt free wannabee forums to hit that debt and continue to save, buying a house has significant overheads for maintenance that transcends the 'it's cheaper than rent' argument.

Thank you for your advice, I’ll be sure to check out that forum to see if it’s a better option.

What significant overheads would I be expecting in particular?
For example, on a new build property, where would that £500 per month saving be going? Genuine question as I assumed it would be available to pay off our DMP.

We already have insurance in our current place and we would obviously look to put some cash into a rainy day fund. For us this would be financed from my £2000-3000 per year pay rise at least for the next 3 years (I’m a teacher).

Thanks again for your input.

BraLo · 23 July 2018 at 5:29PM

ACG wrote: »

I dont think that will be enough to overcome the issues to get you on the high street.

I’ve acted on this today.

Took the other person’s advice, nipped over to debt free board, had a look around made some calls and have (somehow) managed to pay off my 12k DMP for £3100 (got it in writing too).

So. As the DMP was over 6 years old, it now doesn’t appear on either credit file and I won’t be declaring it. There’s no evidence of it having ever existed so that will do nicely for me!

Hopefully, we’ll have a better crack at a mortgage now.

Do we need an adverse mortgage?

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