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Original poster

Borrowing £5000 - words from the wise needed!?

19 replies

pertempsnooo · 29/12/2013 15:07

I need to buy out my irresponsible ex's share of the house (from the creditors..).
I have an income of £5000/year and then tax credits/ child benefit etc. makes it about 20,000.
The house has equity of about 55,000.
My mum is already lending me the rest I just need 5,000 which I can pay off in 18-24 months.
So... I have checked credit report but it seems I have a couple of late payments on the mortgage from when ex was the sole occupant of house and neglected to pay (so I did, late). That is the only negative thing I can find. I have asked Equifax etc to remove my financial association with ex from report (separated for 7 years) as he's bankrupt. Yet for now the mortgage is still in his name aswell as mine. So maybe that will still have a negative effect on my ability to get credit. I am almost scared to apply for anything in case it works against me!
My bank provisionally offers me 20% APR.. not great! What about peer to peer?

OP posts:
Chloebw · 29/12/2013 19:19

Hi I work for the bank, not in mortgages, but I know a bit about credit etc.
if you worried about it I would check your rating on expedia. Although going on what you have said I would not imagine your credit would be that badly damaged.
If you apply for a mortgage I can't really see why it will put you in a bad situation. Either you will get refracted which means your credit is going to be too badly damaged or you will be accepted (kind of damned if you do or damned if you don't!).
Also the bank can't see your actual credit rating but they will have an idea of if it's bad good or average and will usually tell you if they think it's a bad idea for you to proceed!

Original poster
pertempsnooo · 29/12/2013 20:32

Hi Chloe, do you mean Equifax or Experian? or call credit? As they are the big three apparently...! I have disassociated from the ex with the first two and next is call credit.
I do know that my credit rating was good in spite of what I mention above, however I am not sure what counts! I have kept up with payments on an interest only mortgage so maybe I'm no money spinner for banks? no idea!
I have 3 current accounts, one active, one empty and one overdrawn which I am paying off slowly. (500ish OD on average). One has already turned me down for a credit card. Don't know why! The best rate Barclays would offer on a loan is 20%APR over 18 months, provisionally. Not great.
I cannot successfully apply for a re-mortgage I think, until I earn/claim at least 35,000. This is what my mortgage company have told me. I want to stay in this house but have put the re-mortgage on the back burner until I earn more (working on this!) This does mean I will still have this lingering financial connection with the ex (in name only!!).
What I need to know is how I can get the best deal at borrowing 5,000 to buy out the creditors' share of the equity in the house. Any clue?

OP posts:
Chloebw · 30/12/2013 11:34

I have never checked my credit though we get told to recommend experian. That's a tough one. I know with my mortgage that I hadn't been working at my job long enough to be accepted so it's in my mum and dad's name (I gave them the deposit etc and set up a standing offer to them!). The other option is shopping about for loans you can have a loan only account with most banks.

SolomanDaisy · 30/12/2013 11:40

Have Barclays actually offered you that loan? If so, seriously consider taking it, if you can afford the repayments. I think you're quite lucky to get offered something from a mainstream lender.

Original poster
pertempsnooo · 30/12/2013 12:44

Really? With that interest rate? Maybe I am wrong and my credit rating is not the issue. Halifax turned me down for a credit card. Barclays have offered one for 3 months 0% on £1000. Is that also impressive? Never had one before.

OP posts:
AndIFeedEmGunpowder · 30/12/2013 12:50

You can ask potential lenders to do a quotation search rather than a credit check to see if your loan is likely to be approved. The quotation search won't leave a footprint on your file.

Original poster
pertempsnooo · 30/12/2013 12:52

Zoos loans peer to peer lending are quoting 6% now that's much better than Barclays isn't it?!

OP posts:
Jenijena · 30/12/2013 12:53

I don't know much about this sort of thing, but I've used noddle which is a free version of experian.

Good luck.

RedHelenB · 30/12/2013 13:29

Doesn't sound like you may have much choice so your bank may end up being the best offer -0 better that than lose your home I would have thought?

Original poster
pertempsnooo · 30/12/2013 13:59

Thanks gunpowder I have only done soft searches so far... Cautious.

OP posts:
Original poster
pertempsnooo · 30/12/2013 14:05

I meant zopa loans!

OP posts:
Rockchick1984 · 30/12/2013 14:31

Zopa loan is telling you an average rate without taking into account your credit score, its likely to be significantly higher than that (if offered at all).

How long ago were the missed mortgage payments? Unfortunately they will affect you quite a bit, particularly for loans and remortgage, however the more recent they are the worse the impact of them so hopefully they were a good few years ago.

If they were more recent I'd be very tempted to go with the Barclays loan if its been offered and approved.

SolomanDaisy · 30/12/2013 15:39

That 6% is for people with a solid credit rating who aren't taking out a loan equivalent to their annual income. I doubt you will get anywhere near that rate. Maybe an ifa could help?

Original poster
pertempsnooo · 30/12/2013 18:00

The payments on the mortgage were late not missed. When I got my rating from Experian it was really good, almost the highest you can get. I just noticed on the recent equifax one that two months are marked AP on the breakdown of my mortgage, in 2011, Feb and March. It doesn't say anything different to all my other accounts otherwise.
Annual income, does that not include my tax credits Soloman?

OP posts:
AndIFeedEmGunpowder · 30/12/2013 19:01

Could you apply for a notice of correction to be put on your credit report saying it was your crap-with-money ex's fault those two payments were late?

Good on you for buying your house, very exciting. Smile

Original poster
pertempsnooo · 30/12/2013 19:29

Oh I hope it works out. I live here anyway but will be such a relief not to worry anymore about ex or creditors and just get on with it.
I have already got the disassociation. I don't know what AP even means... Would they actually write something along those lines, assumingly just on my word? (these agencies don't strike me as being too bothered about accuracy anyway). I am curious to know whether corrections make a difference.

OP posts:
Ebayaholic · 30/12/2013 19:47

AP indicates that you made an arrangement to pay with your creditors ie you went to them, told them you couldn't afford the repayment and offered to make reduced payments over an extended period of time. It is viewed quite negatively

Original poster
pertempsnooo · 30/12/2013 19:53

Oh dear. Thanks. This is where my blood could start to boil - feels like I will never be rid of the trouble he's caused.
I maybe should look at adding a correction then? If that indeed is possible. I do have evidence from electoral roll that I lived elsewhere at the time and that is on the report.

OP posts:
Ebayaholic · 30/12/2013 20:01

The problem is that your mortgage is a joint and several debt so lenders don't care who makes the payment as long as it is made. The fact that you weren't living there may not make a difference.

At least you have options.... Could you take the finance you have been offered then look at re-financing when the dust is settled? Some lenders only look back three years so your late mortgage payments might not have a impact after March 2014

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