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Mortgage with 5 yr old defaults and 1 income

(27 Posts)
mayaknew Mon 13-Mar-17 21:34:44

We are going to see a mortgage broker but I'm worried we are going to get laughed out the place.

DH earns 25k
I earn nothing (student) so he will be going solo
We get child benefit and TC
We will have a 10% deposit

But he has 2 defaulted accounts from 5 years ago (long story)

Do we have any hope?

Sixisthemagicnumber Mon 13-Mar-17 22:06:05

How much are you trying to borrow? Even if you had perfect credit history you wouldn't be able to borrow a lot because the bank will look at the fact that the £25k earnings has to support 3 people and that reduces the amount that can be borrowed.

mayaknew Mon 13-Mar-17 22:11:59

Around 70-80k

JoJoSM2 Mon 13-Mar-17 23:07:57

Not sure if you have a chance or not but no one should laugh at you - you'll be enquiring to give them business. In addition to your credit rating, they will look at how much you normally spend and whether you'd be able to pay the mortgage. How does your last 3 months look?

mayaknew Tue 14-Mar-17 19:24:22

Last 3 months should be fine nothing I can think of anyway but I don't know dhs finances exactly I know roughly but I don't think there's been anything significant like missed payments or anything.

UncomfortableBadger Tue 14-Mar-17 21:38:21

You (or rather, you AND your broker) need to know your own and your DP's finances 'exactly' & inside out.

Get a copy of each of your statutory credit reports from each of the main agencies (Equifax, Experian, Call Credit).

You need to know exactly how you stand before any further discussions can take place.

mayaknew Tue 14-Mar-17 21:40:42

Why do they need my finances like I said I'm a student with no income I'm not going to have anything to do with the mortgage.

Afterthestorm Tue 14-Mar-17 21:46:03

Are you going to be on the deeds of the house? As far as I'm aware they won't let your partner get a mortgage in his sole name.

Also, if you go into moneysavingexpert and sign up to their credit club you will be able to see your credit report for free, among other things.. May be useful.

UncomfortableBadger Tue 14-Mar-17 21:47:45

You'll potentially be classed as a financial dependant - your household outgoings may be considered as a whole.

Presumably you're going to be named on the deeds? If so, you'll likely be named on the mortgage, even if your earnings aren't taken into account.

Afterthestorm Tue 14-Mar-17 21:47:49

Some lenders will take benefits into account depending on the age of the child, so that will help.

AndKnowItsSeven Tue 14-Mar-17 21:48:08

Halifax and NatWest accept 100% of tax credit as income.

AndKnowItsSeven Tue 14-Mar-17 21:49:38

The bank statement look at what you spend on groceries, socialising etc it's not just if you stay in credit.

foreverlost Tue 14-Mar-17 21:57:26

Defaulted accounts don't look great. You might get a mortgage but your choice of lenders will probably lessen and your interest rate might rise.

They drop off your report after 6 years. Might be worth waiting for this if the broker thinks it will make a big difference?

ChocolateButton15 Tue 14-Mar-17 22:01:36

Defaults come off after 6 years so might be better to wait and save up a bigger deposit. 10% isn't a lot, especially with 1 income and defaults on credit file. Mortgage broker would be best bet as they can give you a good idea if it's possible before applying.

mayaknew Tue 14-Mar-17 23:01:25

We aren't saving the deposit it's being given to us. I don't know if I will be on the deeds of the house. Probably not if the mortgage is in dhs name I'd imagine I don't know I've never owned a house before. I don't want my financial situation to be taken into account because I have debt it's better if DH just does it on his own although he has the defaults he has very little debt.

mayaknew Tue 14-Mar-17 23:02:44

Afterthestorm why would the not allow a person to get a mortgage in their sole name?

Moomintoes Tue 14-Mar-17 23:11:50

You can get a mortgage in your sole name but only if this matches the deeds. So your partners name would be on deeds and mortgage and not you at all. However any income which has your name against and goes to you, such as child ben and tax credits then can't be taken into account and with you being a student you will be classed as a dependant, i.e financially dependant on his income so what he can then borrow on his own will be reduced. Also if you live together and have any joint accounts or loans etc your credit files are likely linked together so any bad credit either of you have will affect the other one too. Good luck with the broker

Sixisthemagicnumber Wed 15-Mar-17 06:52:46

Are your debts big OP? TBH as you are not married and have children you really need to be on the deeds to protect yourself and the roof over your children's head in the event of separation from your partner. It might better to pay off as much debt as possible first and then apply for a mortgage.
FWIW - my husband was earning under £30k when we applied for our mortgage and I was a student and we both had debts (all payments up to date) and we managed to get a joint mortgage without any problems and without needing a broker. The building society did include child benefit and tax credits in the calculations.
We did have a 40% deposit though.

OrangeSquashTallGlass Wed 15-Mar-17 06:59:04

You could call up a broker or a few banks and start asking questions - they should be able to give you a feel for whether it's possible before you start the process properly.

mayaknew Wed 15-Mar-17 07:13:39

We are married confused

Sixisthemagicnumber Wed 15-Mar-17 07:31:18

Sorry maya, my mistake, for some reason I thought I read DP when it actually says DH blush

SchnitzelVonCrumb Wed 15-Mar-17 07:41:17

I think you need to get a bit more clued up as to what his exact financial status is, what your exact financial status is etc.

It would be very unheard of for you not to be taken into account when buying the house.

This is very different to him investing in property with a ltd company etc

Grandadnow3 Sat 18-Mar-17 21:46:59

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

mayaknew Mon 27-Mar-17 18:07:06

Tbh I'm in total denial about my own debt but there's nothing I can do about it til I'm earning a real wage so there's no point.

The frustrating thing is his defaults will be eligible for deletion from his file in January but I really don't think we can live like this any longer it's awful. I hate being at home I literally do anything to avoid it. I hate it.

boin Tue 28-Mar-17 00:29:27

DH got a mortgage in his sole name without any issues, I'm not on the deeds. It's not ideal but as we're married I am protected, and having me on the mortgage would have damaged the application as I have very poor credit (bankruptcy) and his is perfect. I didn't provide any of my own financial information, but we've always been careful not to join our finances (no joint accounts etc). I have registered my home rights on the property so there is some recognition of it being my home, even though I don't have ownership.

With your DH's defaults I think it is better to wait until they fall off his credit record. I would keep checking his records (use the free websites - Noddle, MSE and Clear Score) until you can see it's come off. There is a chance that he could get accepted even with those defaults but the rates offered could be better if he can wait, and it's not really too long even if it feels like it.

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