Discussion
Well I've put off becoming a slave to a morgage for as long as possible, and sooner or later I'm going to have to take the plunge and get my self into debt upto my eyelids (never borrowed money for anything before)
Now my credit rating couldn't be better but a certain other person who will remain nameless but will be picking up 1/2 the bills has 2 'defaults' on her less than perfect rating.
We're looking at borrowing about £70k and will be putting down a large deposit.
I know banks/building societies seem to be chucking money at lenders at the moment, but will the credit rating mean we get shafted.
I'd be looking for a morgage with as much flexibility as possible, ie no penelties for paying off early, etc.
So whats your advice?
Now my credit rating couldn't be better but a certain other person who will remain nameless but will be picking up 1/2 the bills has 2 'defaults' on her less than perfect rating.
We're looking at borrowing about £70k and will be putting down a large deposit.
I know banks/building societies seem to be chucking money at lenders at the moment, but will the credit rating mean we get shafted.
I'd be looking for a morgage with as much flexibility as possible, ie no penelties for paying off early, etc.
So whats your advice?
Should be fine with that to be honest, but it depends what you mena by defaults. I'm assuming you mean failing to pay a credit card bill or something for a couple of months? That doesn't really present an issue provided you are in full time employment etc etc.
More of a problem would be any County Court Judgements on your credit rating.
More of a problem would be any County Court Judgements on your credit rating.
Agreed - it's only CCJs you have to worry about - and being able to prove that you have a reliable income..
you have to remember that a mortgage is a secured loan, so quite different criteria are applied when compared to getting a car loan for example which is unsecured and hence if you default, the bank has a lot more work on their hands to get their money back...
Oh and I ended up getting shafted for trying to evade paying back my student loans.. bah.. I'd banked on the SLC folding under the pressure of their loss making organisation and financial burden before they ever caught up with me for the poxy couple of hundred quid I still owed them.. no such luck.
>> Edited by CarZee (moderator) on Wednesday 8th January 14:22
you have to remember that a mortgage is a secured loan, so quite different criteria are applied when compared to getting a car loan for example which is unsecured and hence if you default, the bank has a lot more work on their hands to get their money back...
yep - I've been through that & we've got a mortgage considerably larger than the one you're after without any problems..
raceboy said:Basically, messed up paying off loans, debt got sold to debt collection firm, debt got paid off sharpish
Oh and I ended up getting shafted for trying to evade paying back my student loans.. bah.. I'd banked on the SLC folding under the pressure of their loss making organisation and financial burden before they ever caught up with me for the poxy couple of hundred quid I still owed them.. no such luck.
>> Edited by CarZee (moderator) on Wednesday 8th January 14:22
Macca, there's business here for you!!
Macca is an independent financial advisor, and TVR owner since he saw mine! He does my mortgage, and will find you a good deal. Try www.mortgages-online.co.uk/ Give 'em a ring, ask to speak to Steve MacAneaney, and tell him nubbin sent ya!
>> Edited by nubbin on Wednesday 8th January 14:26
Macca is an independent financial advisor, and TVR owner since he saw mine! He does my mortgage, and will find you a good deal. Try www.mortgages-online.co.uk/ Give 'em a ring, ask to speak to Steve MacAneaney, and tell him nubbin sent ya!
>> Edited by nubbin on Wednesday 8th January 14:26
Hopefully the other half will know whether she has had any CCJ's made against her or not.
I missed a couple of credit card payments due to sheer bone idleness and forgetfullness (hope none of my clients are reading this) and had no problem at all getting an exceptionally large mortgage late last year.
I missed a couple of credit card payments due to sheer bone idleness and forgetfullness (hope none of my clients are reading this) and had no problem at all getting an exceptionally large mortgage late last year.
It certaintly used to be the case that defaults and CCJ's were subject to the same rules.
When you go for a mortgage your application gets dropped through an automatic scoring system. This score then dictates which mortgage products at that lender you are eligible to apply for.
The list is prioritised with some things being of more importance than others, for example at one of the Credit Reference Agencies in the UK an electoral roll entry is the top scoring item, so if you arent on it then it goes heavily against you.
If this person defaulted more than 7 years ago you are going to be in a much better position than someone who defaulted within the last 7 years. However I believe there are certain defaults and CCJ's that stay on permanently.
Also, if you apply for any sort of finance on anything at all it records a negative against your score. This will be rectified every 30 days were the points taken off for a single application are put back on. This is to track people who apply for many loans on one day and then go travelling for years.
On the whole though there are very very very very few people who absolutely cannot under any circumstances get a mortgage. If you were in the unfortunate situation to be a bankrupt, covered in CCJ's, defaults and lates every month for the last 7 years there are still be lenders that will lend, albeit at about 20%!
HTH
Matt.
When you go for a mortgage your application gets dropped through an automatic scoring system. This score then dictates which mortgage products at that lender you are eligible to apply for.
The list is prioritised with some things being of more importance than others, for example at one of the Credit Reference Agencies in the UK an electoral roll entry is the top scoring item, so if you arent on it then it goes heavily against you.
If this person defaulted more than 7 years ago you are going to be in a much better position than someone who defaulted within the last 7 years. However I believe there are certain defaults and CCJ's that stay on permanently.
Also, if you apply for any sort of finance on anything at all it records a negative against your score. This will be rectified every 30 days were the points taken off for a single application are put back on. This is to track people who apply for many loans on one day and then go travelling for years.
On the whole though there are very very very very few people who absolutely cannot under any circumstances get a mortgage. If you were in the unfortunate situation to be a bankrupt, covered in CCJ's, defaults and lates every month for the last 7 years there are still be lenders that will lend, albeit at about 20%!
HTH
Matt.
Don't think theres going to be too much problem getting what I want, if the worse came to the worse I'd do the morgage in my name only 
Theres 3 years till the defaults disappear, but untill last weekend she didn't even have a bank account
We've both got credit cards with zero balances, and names on the electrol roll, so hopefully should score high enough, soon find out I s'pose
Theres 3 years till the defaults disappear, but untill last weekend she didn't even have a bank account
We've both got credit cards with zero balances, and names on the electrol roll, so hopefully should score high enough, soon find out I s'pose
As an addendum to the above no credit is sometimes worse than bad credit.
If a debtor is a bad risk, but not too bad i.e no flight or refusal to pay then a lender will assess what sort of customer they are from the preported risk.
With no credit its literally a gamble for the lender as they have nothing to go on at all.
Matt.
If a debtor is a bad risk, but not too bad i.e no flight or refusal to pay then a lender will assess what sort of customer they are from the preported risk.
With no credit its literally a gamble for the lender as they have nothing to go on at all.
Matt.
dont think there will be a problem for you. I suggest you get a tracker or smart morgage. they dont have tie in's. the latter uses savings and current account to reduce interest.
I would suggest you login to motley fool BB's for some more serious/in depth advice? there lots of knowledgable financial folk on there.
http://boards.fool.co.uk/messages.asp?mid=7660703&bid=50067
I would suggest you login to motley fool BB's for some more serious/in depth advice? there lots of knowledgable financial folk on there.
http://boards.fool.co.uk/messages.asp?mid=7660703&bid=50067
I can vouch for getting some advice from an independant advisor. I went to all the banks and bulding soc's and thought I had worked out the best deal. Went to see an independant and he worked out a totally diffrent story which made much more sense and even got me some cashback thrown in. He also rings me up each time the current contract expires (if thats the right term) and I can change, which generally has saved me even more money. Can't recommend it more.
Just a suggestion look at the offset mortgages, if (part of Halifax) and Virgin. You have to move your bank account to them but you offset any balance against the mortgage and only pay interest on the balance. So say your average balance on your account is £500 you save £25 per month mortgage interest.
Even better if you have any saving, put them in the account and you save interest at the mortgage rate, rather than earn interest at 2% and paying tax on the interest.
Even better if you have any saving, put them in the account and you save interest at the mortgage rate, rather than earn interest at 2% and paying tax on the interest.
raceboy said: Like the look of them, as I'm not sinking all my savings into the house, I'll have a few £££'s sitting about for a rainy day and if they can save me a few £££'s on the morgage all the better
sorry, thats what I meant about smart morgages.
I use First Direct, very good service, very stress free organization of the funds and online account control etc.
I always wondered whether I had any clients on here (bar Nubbin, of course). Basil, I see Steve Langrick helped you – thanks for your commendation.
CCJ’s and Defaults can be a problem with many popular lenders depending on the number of CCJ’s or defaults, when they occurred and the amounts involved. You can make matters worse if you apply to one lender after another, getting refused each time. This is because a credit search will be logged each time you apply and the next lender to consider you will see this when they conduct their credit search; lenders subscribe to varying levels of information from the credit agencies (Experian and Equifax), so could get nervous, believing you are applying for too much credit or that a previous lender was privy to more detailed information that led to a decline. The answer here is to obtain a copy of your credit file (£2) and let a broker or lender see it to determine the extent of the problem – the broker will know which lenders will say yes.
2 CCJ’s for more than £250 each will probably stop you from obtaining the most competitive mortgage but, providing it was more than 6 months ago and everything has been fine since then you should not pay too much over the odds (expect 1% more than the best). A good explanation for why a CCJ occurred can also help (e.g. lost job and showing signs of getting back on track). A CCJ paid in full within one month of being issued will not be recorded on your credit file but the default information that led to the CCJ will still remain.
The amount that you are looking to borrow will also affect a lenders decision to lend when a default or CCJ exists. If you’re looking for 100% then forget it. 75% or less should smooth it over with most lenders but not all.
Having no track record of credit can influence a lender’s decision. So too can living in an area where there are high occurrences of bad debt or where a family member shows adverse credit. While there is no god given right to credit, if you are refused for and you feel that there is information recorded that could influence another lenders decision then you can have a note placed on your credit file explaining your situation. You can also apply to disassociate yourself from family members that have adverse credit recorded against them.
All information is removed from your credit file after 6 years has elapsed. Payments to credit agreements are displayed over 18 months (a series of zeros shows good payments, a number (1-3) represents the number of consecutive missed payments, after 3 you get a default and this will remain for 6 years. If you have been unfortunate to have experienced adverse credit and start to repay the debt only to fall behind again you run the risk of keeping the default information on your file for a further 6 years, starting from the date you default a second time. Don’t allow your debt to get passed to a debt collection agency (b’stards) – they buy debt for about 20% of its value, wait a few years while interest builds up and then pounce. Once you make a payment to the collection agency you admit liability to the debt – default again and it remains for another 6 years. If a creditor warns that they are passing the debt to a debt collection agency then make them a silly offer – they might just accept it.
Offset mortgages are good if you have 20%-30% of the balance of your mortgage available to put on deposit (i.e. offset savings against the mortgage), otherwise you can get a better deal from a more traditional mortgage and your savings in a competitive savings account. They’re also good if you want to borrow more money for a future project (e.g. new TVR) because, subject to affordability and property value, they will let you borrow extra, pay it back (thus incurring no interest on the ‘project money’) – then simply draw it down when you need it. With either type of mortgage try to get a lender that calculates their interest daily or monthly (does not matter if you have an interest only mortgage) – the difference in monthly payments between dailymonthly and annual calculations can equate to an additional 0.35%’ish on the quoted interest rate.
I didn’t mean to do a ‘war and peace’ but now I’ve typed it I’ll leave it all in.
Cheers
CCJ’s and Defaults can be a problem with many popular lenders depending on the number of CCJ’s or defaults, when they occurred and the amounts involved. You can make matters worse if you apply to one lender after another, getting refused each time. This is because a credit search will be logged each time you apply and the next lender to consider you will see this when they conduct their credit search; lenders subscribe to varying levels of information from the credit agencies (Experian and Equifax), so could get nervous, believing you are applying for too much credit or that a previous lender was privy to more detailed information that led to a decline. The answer here is to obtain a copy of your credit file (£2) and let a broker or lender see it to determine the extent of the problem – the broker will know which lenders will say yes.
2 CCJ’s for more than £250 each will probably stop you from obtaining the most competitive mortgage but, providing it was more than 6 months ago and everything has been fine since then you should not pay too much over the odds (expect 1% more than the best). A good explanation for why a CCJ occurred can also help (e.g. lost job and showing signs of getting back on track). A CCJ paid in full within one month of being issued will not be recorded on your credit file but the default information that led to the CCJ will still remain.
The amount that you are looking to borrow will also affect a lenders decision to lend when a default or CCJ exists. If you’re looking for 100% then forget it. 75% or less should smooth it over with most lenders but not all.
Having no track record of credit can influence a lender’s decision. So too can living in an area where there are high occurrences of bad debt or where a family member shows adverse credit. While there is no god given right to credit, if you are refused for and you feel that there is information recorded that could influence another lenders decision then you can have a note placed on your credit file explaining your situation. You can also apply to disassociate yourself from family members that have adverse credit recorded against them.
All information is removed from your credit file after 6 years has elapsed. Payments to credit agreements are displayed over 18 months (a series of zeros shows good payments, a number (1-3) represents the number of consecutive missed payments, after 3 you get a default and this will remain for 6 years. If you have been unfortunate to have experienced adverse credit and start to repay the debt only to fall behind again you run the risk of keeping the default information on your file for a further 6 years, starting from the date you default a second time. Don’t allow your debt to get passed to a debt collection agency (b’stards) – they buy debt for about 20% of its value, wait a few years while interest builds up and then pounce. Once you make a payment to the collection agency you admit liability to the debt – default again and it remains for another 6 years. If a creditor warns that they are passing the debt to a debt collection agency then make them a silly offer – they might just accept it.
Offset mortgages are good if you have 20%-30% of the balance of your mortgage available to put on deposit (i.e. offset savings against the mortgage), otherwise you can get a better deal from a more traditional mortgage and your savings in a competitive savings account. They’re also good if you want to borrow more money for a future project (e.g. new TVR) because, subject to affordability and property value, they will let you borrow extra, pay it back (thus incurring no interest on the ‘project money’) – then simply draw it down when you need it. With either type of mortgage try to get a lender that calculates their interest daily or monthly (does not matter if you have an interest only mortgage) – the difference in monthly payments between dailymonthly and annual calculations can equate to an additional 0.35%’ish on the quoted interest rate.
I didn’t mean to do a ‘war and peace’ but now I’ve typed it I’ll leave it all in.
Cheers
Whats the score with 'Buy To Let' mortgages?
I viewed (such a stupid term for the event when some daft bint makes an attempt to prove that she knows more than you about buildings...when you work for a frikin BUILDERS!) a flat today just round the corner, lovely it is, new carpets throughout, brand new bathroom suite, new fitted kitchen, new light fittings, new gas central heating system and a combi boiler, laminated flooring in hall, freshly painted throughout etc etc etc. Anyway, I left the flat and came home (was supposed to be 35 miles away working, but erm....I got lost boss. ) and phoned a recommended (by the joiner that works for us) mortgage advisor broker bloke type thing and made an appointment for 11.30 in the morn.
Anyone got any idea if I'll get a 100%? £26K over 25years. Intending to let out for around £294.75 () PCM Half Furnished.
>> Edited by tvradict on Tuesday 14th January 20:52
I viewed (such a stupid term for the event when some daft bint makes an attempt to prove that she knows more than you about buildings...when you work for a frikin BUILDERS!
) a flat today just round the corner, lovely it is, new carpets throughout, brand new bathroom suite, new fitted kitchen, new light fittings, new gas central heating system and a combi boiler, laminated flooring in hall, freshly painted throughout etc etc etc. Anyway, I left the flat and came home (was supposed to be 35 miles away working, but erm....I got lost boss. ) and phoned a recommended (by the joiner that works for us) mortgage advisor broker bloke type thing and made an appointment for 11.30 in the morn. Anyone got any idea if I'll get a 100%? £26K over 25years. Intending to let out for around £294.75 (
) PCM Half Furnished. >> Edited by tvradict on Tuesday 14th January 20:52
You won't get 100% on buy to let. Typically, you need 20% deposit. Lenders may also require the property to be capable of yielding rental income of 130% of the interest that you pay on the mortgage or you must demonstrate that you can afford the mortgage along with any existing credit that you have, including your mortgage if you have one.
Rates on buy to let are higher than residential properties (expect an extra 1%) and quite a few come with arrangement fees. If you have a mortgage already then consider raising capital against that if the deposit is not readily available. If you have not changed your mortgage recently then look at a remortgage anyway, you could save quite a lot. Check you have no redemption penalties though.
Not trying to put you off but make sure you get a good assessment of the property’s income potential and letting ability. The rental market is not what it used to be. Yields are averaging 6%, when a few years ago they were 10%+. This is because rental income has not risen at the same rate as property prices. If the market turns, prices fall and you have periods when the property is not let it prove a bad experience.
There are good tenants as well as bad, vet them well and get a good deposit from them. Find a bad one and you may find the flat in a mess when they move on; a good reason not to furnish the place with top quality furnishings.
Don't pay any fees to the broker. He will get paid by the lender and this should be enough to cover his time. (edited. then again - on a mortgage of £26k he won't get too much so you might have to pay him a fee. £300pcm on £26k value, there really is a north/south divide)
>> Edited by macca on Tuesday 14th January 21:23
Rates on buy to let are higher than residential properties (expect an extra 1%) and quite a few come with arrangement fees. If you have a mortgage already then consider raising capital against that if the deposit is not readily available. If you have not changed your mortgage recently then look at a remortgage anyway, you could save quite a lot. Check you have no redemption penalties though.
Not trying to put you off but make sure you get a good assessment of the property’s income potential and letting ability. The rental market is not what it used to be. Yields are averaging 6%, when a few years ago they were 10%+. This is because rental income has not risen at the same rate as property prices. If the market turns, prices fall and you have periods when the property is not let it prove a bad experience.
There are good tenants as well as bad, vet them well and get a good deposit from them. Find a bad one and you may find the flat in a mess when they move on; a good reason not to furnish the place with top quality furnishings.
Don't pay any fees to the broker. He will get paid by the lender and this should be enough to cover his time. (edited. then again - on a mortgage of £26k he won't get too much so you might have to pay him a fee. £300pcm on £26k value, there really is a north/south divide)
>> Edited by macca on Tuesday 14th January 21:23
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