Chances of getting a mortgage with 2 defaults

Yorkiepuddin · 17 June 2018 at 12:46PM

Afternoon all.
Is there any point seeing a broker /applying for a mortgage if i have 2 unsettled defaults.
A little about our situation, we are currently stuck private renting which takes up the majority of my wage, leaves very little to service my debts let alone save for a deposit.
We have been offered an amazing gift from our family's of £50000 to be used solely to get us on the housing ladder, cheap 2 bed is around 200k so 25%.
Unfortunately after being made redundant and homeless in 2014/15 my finances took a major hit and i have 2 defaults. 1, credit card default dec 2015 at £2300, current balance of £550. 2, loan defaulted may 2016 at 8900, current balance 8650.
I have seen a shared ownership house with 25% for 55k, combined rent and bills would be £1000 a month less than currently paying so could clear debts in no time. However my partner is not keen and thinks we should try for a mortgage and go with full ownership, would this even be possible. We have a combined income of 37500 that should increase by 5000 in the next 6 months.
Chance of success or is it a waste of time. Any thoughts appreciated.

ACG · 17 June 2018 at 12:51PM

With a 15% deposit, there will be options going down the full ownership route. Rates might not be market leading but somewhere around the 3-4% mark maybe.

Speak to a broker with your credit reports and they can look into it for you.

enthusiasticsaver · 17 June 2018 at 2:45PM

It looks like full ownership is within your grasp but the defaults could mean that a higher rate will be applied to any mortgage you go for. You need a mortgage broker who specialises in poor credit applicants.

hunnibee_2 · 17 June 2018 at 8:35PM

Have your defaults been satisfied? And how old are they?
These will be big deciding factors in who will lend to you. Seek advice from a mortgage advisor (I spoke with 3 before I decided who would be best for us!)
You may need to answer to why you have defaults also during your application.

amnblog · 17 June 2018 at 9:11PM

This is a case that on the face of it can be placed, with the right advice.

Yorkiepuddin · 17 June 2018 at 10:59PM

Thanks all for taking the time to reply. I will get on the phone tomorrow and speak to some brokers, i honestly thought i would be wasting their time. Even a rate of 5% would be £200 a month less rhan our current rent.
Just a little confused over the range of fees from free (commission based) to 3k+

ACG · 18 June 2018 at 7:27AM

Brokers fees do vary.
I used to be fee free, but I realised that in order to earn a wage, I would need to be very busy. That meant if there was ever a problem or someone wanted to get hold of me it was quite difficult as I needed to be in other appointments.

I found quite quickly that I was basically just fighting fires, not around for people and in general it was not a great experience for me or the customer.

On the flip side £3,000 to arrange a mortgage is ridiculous. Even half that is a little on the high side.

Chances of getting a mortgage with 2 defaults

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