To ask for free STRAIGHTFORWARD mortgage advice

[FizzyCherry]

Just need someone to explain how I stand in my specific situation, but although I’m pretty educated, I am severely dyslexic and things like mortgages completely, utterly bamboozle me. Wonder if someone could explain for me without making it into a lecture like the bank has done.
We really need to move house.
We have £95,000 left on the mortgage we have.
I’ve been here 18 years (first home) but have had it valued at roughly £185,000.
Due to his appalling money management skills before we met, OH’s credit rating is 1/5, but he earns £43,000.
My credit rating is not much better because I freelanced and had temporary contracts for 15 years, and have only had a permanent (part time) contract for 4 years.
My take home is roughly £5,000 a year, so we have a combined income of £48,000 before tax.

If we sold our house for, say, £180k, we obviously would only be able to buy something similar, so it seems pointless.

My question is, how do we go about increasing our budget if we have a bad credit rating or are we stuck here till OH has improved his rating?
What sort of figure would we be able to get for a mortgage?

OH insists it’s all a complete waste of time as we can’t improve things, so I want to prove that it’s not.

Can you see a financial advisor? They would be the best people to speak to about how much you can borrow and the best way to go about borrowing it. I think the banks also have online mortgage calculators of roughly how much they might let you borrow based on your income and outgoings but that would be a standard answer not one tailored to your situation (so might not be accurate if you have poor credit scores).

Sounds like you have equity of roughly £90k in your property for a deposit.

It really depends on a lot of things here, is your mortgage fixed rate i.e. do you need to port it to move? If so you’ll likely be stuck with the same provider to ‘top up’ rather than being free to shop around.

Some rare mortgage companies do lend up to 5x person 1’s salary then 1x person 2’s (meaning in your case 5 x £43k and 1 x £5 = £220k plus your deposit of £90k with an absolute max budget of £310k for new place). HOWEVER both of your credit ratings will likely affect this. Without knowing the specifics the only way you’ll get a clear answer is to phone your provider and ask what’s possible in a new mortgage offer assuming you sell for £185k (and you can do that hypothetically as you’re just asking questions for information and not doing anything).

The % of your deposit will also likely affect the risk to the lender if you can’t pay as well, as if let’s say you buy a house worth £200k, put down a deposit for £100k, and they have to repossess house (god forbid!) they will be reasonably comfortable they’ll recoup their £100k if market moves about a bit and house only sells for £190k. The risk to them is much greater if you only put down say a £5k deposit.

Will say a £90k deposit is a good deposit if you’re looking to stay below £270k (they’d give you a 70% mortgage which has better rates and less risk to them).

Hope that’s vaguely helpful and not too confusing! We moved for a third time last year - it was stressful to say the least!

My advice would be to contact a whole of market mortgage broker (you can do a google search or ask friends/family for a recommendation.

They have access to all the lenders, and as such should be able to tell you what your maximum borrowing potential is, based on your income and outgoings including any credit agreements.

Most lenders no longer use the income multiple method, and instead have their own affordability calculators - and they vary widely between the different lenders.

The most important bit is to download both yours and your husband’s most recent credit report and show it to the broker. They will then use the information to check the various lender’s criteria on adverse credit, to ensure that you are matched to the correct one - that’s assuming you are not still in a special rate period and as such tied to your current mortgage lender. Again, a broker will advise on this.

It will depend on how long ago the adverse credit is and what it is, as even some high street lenders will accept mild credit history blips if they are over 24 months ago.