Mortgage with Bad Credit

6
Found 30th Jun
Hi everyone...

Just a bit of expertise please.

My fiance and I are looking to get onto the property ladder. I have inherited 30k which we plan to use as a deposit however, we have spoken to both Santander and Barclays who won't be able to give us a mortgage due to my poor credit history.
Essentially, I have a couple of Defaults to my name and have recently settled a few other debts which has got me back in the 'black' for the first time in ages (which is a huge relief).
We have spoken to a broker who has managed to find us an initial offer of £213,500 but we were looking more towards the £270,000 mark if possible? I'm in the Hertfordshire area if that's applicable...

I realise now just how important managing your money is which is one of the reasons I'm a member on HUKD!

Have any of you used a good broker who managed to find you a mortgage with similar circumstances? Feel free to PM me with contacts.

Have a good one and enjoy the sun!
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6 Comments
Mortgage companies use new affordability criteria which can significantly reduce what you can get in the way of the amount you can borrow compared to that you could borrow 3+ years ago, this takes into account lots of criteria for example each dependant reduces your borrowing amount by 25k, other factors such as outstanding loans (if you have just cleared the debt this will show as outstanding for up to 3 months), it might be worth holding off a while if they have taken those into account but if not then it’s likely that what you have been quoted will be the same at all the banks as they now all use the same affordability criteria.
If it’s you putting up the £30k and your partner nothing look into doing it as tenants in common. That way your £30k is safer if it does no work out. By the sounds of things last thing you want is financial problems in the future,
30k is not that great on a 270k house. I would say you need at least 54k to get a good deal.

I would thinnk that you could get a mortgage but the rates would be high.

It may be worth buying a cheaper place then moving in 2 years time
Places like accord mortgages or the mortgage works.

You might be better seeing a broker who can point out lenders for people with poor credit.

Beware you will probably pay a higher rate as a result as you will be deemed higher risk
It might be better to build up your credit rating first. Defaults and a poor credit rating makes you pretty sub prime which is going to limit who will lend. If you can use the money you were paying out building up a larger nest egg, showing you have disposable income and a proven track record at saving, you'll find it a lot easier to get a better and wider choice of deals
You haven’t mentioned what your combined income is? Even with no bad debt issues you’d be looking to earn approx £60k between you to get a £270k mortgage...? Do you have that type of income as you’ll be struggling to get £270k without it.
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