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Original poster

Getting a mortgage troubles

28 replies

Zarah123 · 31/03/2016 18:08

Hi all,

DH and I have been looking to buy our first home in a way out west London suburb. We have been house hunting for over a year.

Whilst my credit score is 5/5, DH's is quite bad because he has a default due to non-payment of a British Gas bill and 3 late mortgage payments made 1 year ago on his now sold house.

Because of this, the banks won't lend to us. We have £80k deposit and the property we want is £465k. Our combined salary is £85k per annum.

Do you know if a mortgage broker could help us? Can you recommend any?

I can't see a light out of this house buying tunnel and we are in our mid-thirties.

Many thanks

OP posts:
YouSay · 31/03/2016 18:12

You could try a mortgage broker who deal with pepper. They take people with a less then perfect credit score. Their list of brokers is on their site.

Bearbehind · 31/03/2016 18:14

A mortgage broker who specialises in adverse credit might be able to help you but, at just over 4.5 times your income, I suspect this might be difficult- that is about the maximum even squeaky clean borrowers can secure.

How old is the default? Is it settled?

When you say 'the banks won't lend to us' how many banks have you tried? How many credit checks have been done?

This in itself further hinders your chance of getting a mortgage.

Bearbehind · 31/03/2016 18:19

Do you have additional funds for the stamp duty and fees (probably about £15k) or will these need to come out of the £80k?

Artandco · 31/03/2016 18:21

I think that's too high.

3 times salary is £85k x3 = £255k

Plus £80k deposit

That's £335k maximum really you have for a property

BumbleNova · 31/03/2016 18:23

I suspect the real issues is the most recent mortgage payments. Yes definitely get a broker, they are experts in what each lender wants.

I used a broker and got a mortgage - I have a default on my file, so its not impossible.

However, as other point out, if you are more risky from a credit perspective, you will not be able to borrow as much as you otherwise would. 4.5 times joint income is probably too much of a stretch.

Original poster
Zarah123 · 31/03/2016 18:24

Thanks YouSay and Bear.

Bear, the default was settled 5 months ago.

We have only tried 3 banks - Natwest, Nationwide and Barclays.

None of them have run a full credit check, to avoid worsening our credit score.

DP got credit checks from Equifax and Noddle 5 months ago.

Yes, we have an additional £10k for stamp duty/legal fees (Still not enough I realise).

Do you know any reputable brokers?

Thanks

OP posts:
Bearbehind · 31/03/2016 18:25

It is possible to borrow more than 3 times a joint salary (although it's affordability is more relevant than income multples nowadays).

The bigger problem is the default and late mortgage payments- thinking about it from a lenders point of view- how keen are you going to be to lend someone money when the paid their previous mortgage late on multiple occasions only a year ago?

Bearbehind · 31/03/2016 18:27

I don't know any adverse brokers but maybe a Google search might point you in the right direction- I think there are independant websites that list them.

Original poster
Zarah123 · 31/03/2016 18:28

Thanks. Natwest gave us a mortgage in principle for £450k, so we were looking at properties in that price range. They thought they could make a case to the underwriters but decided not to in the end.

So hard to find a 3 bed semi in our area for under £430k. We may have to look for a smaller house or a flat.

OP posts:
Bearbehind · 31/03/2016 18:29

Do you have any debts/ loans as this further hinders your prospects?

Original poster
Zarah123 · 31/03/2016 18:32

Yes, DH was very thoughtless about bills and mortgage payments, even though he had the money. He is very regretful now but I can see why a lender would be hesitant to lend to us.

Thanks Bear, I'll make some calls tomorrow.

OP posts:
Original poster
Zarah123 · 31/03/2016 18:33

Bear, we both have student loans of around £8k each, but that's it.

OP posts:
BumbleNova · 31/03/2016 18:35

If the default was so recent, I think you may find it hard going. best of luck OP, I hope you find something. Have you had a look at Martin Lewis's website - moneysavingexpert? I think it may have info on adverse brokers.

where are you planning on finding the extra for stamp duty, lawyers fees, surveys and moving costs?

Bearbehind · 31/03/2016 18:42

Student loans aren't as bad as regular ones but the repayments are factored into your affordability.

I suspect you are going to have to set your sights a bit lower and probably wait until the adverse things are a bit older but good luck anyway.

Original poster
Zarah123 · 31/03/2016 18:42

Thanks Bumble. I'll have a look at MSE.

I was going to take £2.5k out of a work share savings scheme and ask mum if she cound lend some too.

It looks like we may have to re-set our expectations.

We are renting a furnished flat so don't have much to move. The silver lining I guess :)

OP posts:
Original poster
Zarah123 · 31/03/2016 18:43

Thanks Bear. Brew

OP posts:
wowfudge · 31/03/2016 19:20

Be wary of borrowing money to meet moving expenses - mortgage lenders don't like it.

OceanView · 31/03/2016 19:34

I would suggest making an appointment and going to see these people www.firstmortgage.co.uk/contact-us/

Bearbehind · 31/03/2016 20:13

Lenders don't tend to ask about how fees will be funded. Obviously if you borrow them from somewhere that appears on your credit file then it's an issue but if it's coming from family then it shouldn't be an issue.

A lender only cares where the deposit comes from.

Having said that, there's much bigger hurdles to get over here before that is even a consideration.

Mougly · 31/03/2016 22:05

I had the same problem with British Gas. I was lucky that It went to default in a property I no longer lived in so it wasn't my bills. It took 9 months to resolve.
Lenders will look at Experian and Equifax in that order. I used Which mortgage brokers. They are independent consumer based so will give you honest answers. Their advice was not to approach lenders while in default, as this is the one thing they will not accept, so I waited till it was clear.
I would suggest that you look for something cheaper in a different area or a flat and be prepared that you might have to be the only one who can take out the mortgage as a default lasts for 6 years.There are lenders that will consider defaults but the interest rate will be insane and no one ever recommended them. Buy small as the only borrower if you have to and upscale in 6 years, always better than paying rent. I know it's very frustrating Good luck!

CityDweller · 31/03/2016 22:09

We used an excellent broker when we (very surprisingly) failed affordability on our mortgage application. He went above and beyond and pulled out all stops to get us a deal quickly so that we didn't lose our purchase. Happy to give you his details if you pm me.

poppet131 · 31/03/2016 22:39

It might be tricky as high street lenders usually ignore defaults when they are over 6 years as they will drop off your file. Some high street lenders are a bit more flexible IF the default was registered AND settled over three years ago. Be aware of adverse credit lenders as they have very high interest rates. Try a high street bank that has manual underwriters that don't focus too much on credit scores - Clydesdale (part of Yorkshire bank) might be a good shout. Good luck!

Bearbehind · 01/04/2016 01:50

Lenders will look at Experian and Equifax in that order

Where do people get such nonsense from? Hmm

It scares me that people post things like this as the gospel truth when it's an absolute load of bollocks.

Different lenders use different credit reference agencies. Some use one, some use more- there's no 'one rule fits all'

Timeforacatnap · 01/04/2016 21:49

We have had problems initially but used the inhouse mortgage advisor with the estate agent (national chain) for the property we offered on, had 2 declines but final one went for a referral and have had a full mortgage offer after an affordability check. Might be worth exploring?

Bearbehind · 01/04/2016 22:33

Sorry to keep contradicting posts on this thread but the last thing you need is an EA in-house mortgage advisor who is only used to straight forward cases.

There has been some very dubious advice on here to say the least.

-It is possible to get a mortgage for more than 3 times your income.

-It is possible to get a mortgage if you have a default within the last 6 years (number/ amount/ settlement date being very important)

-Yes adverse credit lenders charge more but if no one else will consider you that's the price you pay (within reason obviously)

  • not all lenders use the same credit reference agencies in a specified order

I really hope this has demonstrated that what you need is a broker who is experienced in these situations.