Mortgages help please!!!!

[imissworthing2]

Hello Virtual Friends,

Can anyone tell me if it is possible to get a mortgage with a poor credit rating.
My girlfriend and I want to get our first place. I for some unknown reason have a bad credit rating( never had a credit card in my life) and combined we have an income of £34,000 per yr. (14 me 20 her)

My question is would it be better for her to try to get one on her own or are there some lenders out there who whould still give us both a mortgage?( maybe with a higher interest rate for example)

Paying rent out each month is starting to get to me, especially when we could own a place and be paying lower monthly repayments!!


Cheers

 

[Mendoza]

Im in the same boat as you, looking for a place, but finding it hard to get a mortgage on a lowish wage, and a credit rating thatinvolves no credit card. Was advised to get one, buy something and pay it off until the end of the year to build up a score. Have money for a deposit, but not to pay off mortgage. Was planning to buy, and then rent a room out to pay some of the mortgage

Although house prices came down, wages werent going up, so the gap in the market is huge for first time buyers

Mortgage lenders will only lend 4 x or 4.5x your salary, so it becomes hard to find a property you want with the price the mortgage lender will give you

 

[Gazwag]

Ask Uncle Spielberg

(but ignore his betting advice )

 

[imissworthing2]

Fortunately I live in Derby now and there are plenty of cheap 60k places about. Month repayments would only b about 300quid. I am hoping there might b some lenders out there for people with poor credit. probably a dodgy back street establishment or somthing!!!

 

[Hiney]

Poor credit isn't necessarily a barrier to getting a mortgage although it's certainly not as easy as it was 2/3 years ago.

You are unlilely to be able to borrow more than 60% of the purchase price with a poor credit rating and, depending on how poor the rating is, it might be a no-no anyway. The other thing is the rate. Abbey and the like are happy to lend at 3.29% but only to people who are sqeaky clean. You would probably be looking at 7% upwards.

Basically, if you haven't got a huge deposit then forget it, but there is no harm in asking.

There is a difference between a 'poor' credit rating, which comes about from missed payments, CCJs etc, and a 'low' credit rating, which is more to do with a lack of information.

 

[Garage_Doors]

Familiar with the credit rating being poor/low because i never borrow money. (except morgage).
To get a good credit rating you have to borrow money and be seen to pay it back correctly.
I have never been one to buy suite/ television. computers on credit so don't have a credit hstory as such.
When i changed from having a company car to having my own with an allowance i wanted to borrow to buy one. but because i had never borrowed money before i have a poor/ low rating.

 

[imissworthing2]

yeah it seems abit baffling but also understandable in another sense!!

Hopefully my gf's good credit will balance things out in a joint application!!

 

[Mendoza]

I think after the banks lent Southampton FC loads of money, things have tightened up and they dont want to lend money to people who they have no information on if they can pay stuff back

 

[sully]

Mortgage lenders will only lend 4 x or 4.5x your salary, so it becomes hard to find a property you want with the price the mortgage lender will give you

Are they still lending such high multiples?

To be honest, that's unaffordable when interest rates go up again (which they surely will). You'll need to be banking on your salary going up as well or you'll be in big trouble.

Back in the high interest rate days (10% +), paying back 3 x salary was a real struggle if you had no rooms to rent out.

 

[saafend_seagull]

I have a bank account in luxembourg, does this CC count towards a credit rating if i buy in england??

otherwise i am in the same shoes, but i'll have like a £30k deposit to put down, would that help me get a lower rate??

 

[Uncle Spielberg]

Im in the same boat as you, looking for a place, but finding it hard to get a mortgage on a lowish wage, and a credit rating thatinvolves no credit card. Was advised to get one, buy something and pay it off until the end of the year to build up a score. Have money for a deposit, but not to pay off mortgage. Was planning to buy, and then rent a room out to pay some of the mortgage

Although house prices came down, wages werent going up, so the gap in the market is huge for first time buyers

Mortgage lenders will only lend 4 x or 4.5x your salary, so it becomes hard to find a property you want with the price the mortgage lender will give you

You can get a mortgage with no credit card and up to 5 x joint incomes.

 

[Uncle Spielberg]

Hello Virtual Friends,

Can anyone tell me if it is possible to get a mortgage with a poor credit rating.
My girlfriend and I want to get our first place. I for some unknown reason have a bad credit rating( never had a credit card in my life) and combined we have an income of £34,000 per yr. (14 me 20 her)

My question is would it be better for her to try to get one on her own or are there some lenders out there who whould still give us both a mortgage?( maybe with a higher interest rate for example)

Paying rent out each month is starting to get to me, especially when we could own a place and be paying lower monthly repayments!!


Cheers

Should not be a problem. It will depend on the size of deposit you have , 90% may be possible but over 90% forget it and to get the best rates a deposit of 25% or 40% is still needed 2 years into the credit crunch. Basically we have 6 lenders in the UK now who dictate the market and they only really want 75% mortgages and under. for example HSBC like to print their headline rates a lot but at 90% loan to value only 1 in 5 gets approved.

 

[Uncle Spielberg]

Anyone needing me to review their life cover and buildimgs/contents cover let me know as it can be very expensive if arranged through banks and people who only use one company.

 

[Uncle Spielberg]

Six mortgage lenders increased their hold over the market for new UK home loans in 2008, according to Council of Mortgage Lenders (CML) data.

The top six, led by the Lloyds banking group, accounted for 78% of all new loans, compared to 72% the year before.

The CML said the credit crunch, which started in 2007, had dried up the supply of mortgage finance.

Overall new lending fell by 28% last year, with some specialist lenders being driven out altogether.

"The lending community itself has undergone... dramatic changes," the CML said.

"With so many lenders either merging or ceasing lending, this year's largest lenders' table has changed more than in other years," it added.

Driven out

A key factor was Northern Rock dropping out of the top-ten mortgage lenders as a result of its insolvency in 2007, when it accounted for 8% of all new lending.

In 2008 it lent just 1.1% of new mortgage funds.

But the CML said another factor was that specialist lenders - those which did not depend on savers' money to finance their lending - had fallen from a 7% share of new lending to just 2%, and of a much smaller market.

Those lenders still in the market have only limited amounts to lend, so they aren't competing hard with each other

Ray Boulger, John Charcol
"In effect, many specialist lenders ceased new lending in 2008," the CML said.

Ray Boulger of mortgage brokers John Charcol, said borrowers were now receiving the worst of all possible worlds.

"If you have fewer lenders you have less competition," he said.

"Those lenders still in the market have only limited amounts to lend, so they aren't competing hard with each other if borrowers have less than a 25% deposit," he added.

After Lloyds, the biggest lenders in 2008 were Santander, the Nationwide, Barclays, RBS and HSBC.

Mergers

Banks and building societies were also badly affected by the drying up of funds from the wholesale banking markets.

House prices fell, undermining the value of their past loans, and more borrowers defaulted on their mortgages because of the recession.

One effect was a flurry of mergers and takeovers, with some of the more financially troubled lenders having to be rescued by larger operators.

Lloyds TSB took over HBOS, which meant that the first and third largest lenders were combined.

And the Spanish bank Santander, which had already taken over the Abbey, also took over the Alliance & Leicester.

Among building societies, the Nationwide took over both the Cheshire and Derbyshire building societies, and there were mergers between the Scarborough and Skipton, the Catholic and the Chelsea, and the Barnsley and Yorkshire building societies.

"We may not have seen the end of the current wave of consolidation," the CML warned.

"So, next year's table is likely to look different again, with more new names and an even larger market share in the hands of the largest firms," it added.

 

[Insel affe]

Anyone needing me to review their life cover and buildimgs/contents cover let me know as it can be very expensive if arranged through banks and people who only use one company.

Here is the Uncle in action .............

 

[imissworthing2]

Should not be a problem. It will depend on the size of deposit you have , 90% may be possible but over 90% forget it and to get the best rates a deposit of 25% or 40% is still needed 2 years into the credit crunch. Basically we have 6 lenders in the UK now who dictate the market and they only really want 75% mortgages and under. for example HSBC like to print their headline rates a lot but at 90% loan to value only 1 in 5 gets approved.

Thanks US,

I Reckon we could probably get 5k together and look to get a place for about 50k.

Would the backs look favourably on us as its only a same mortgage in comparison to some?

 

[Uncle Spielberg]

Where do you live Delhi ?.

In theory a 45k mortgage on a 50k purchase is possible. The income is no problem.

Best bet is your own bank on this occassion. There are very few lenders at 90% and I think the rates aree around 7% which is toilet.

Who do you bank with ?.

 

[imissworthing2]

haha delhi derby, same difference!!!

I bank with Natwest and my girlfriend is with barclays.

We were looking at doing a place up and selling it off quite quickly, is there things we need to look out for re early repayment charges/bringing one mortgage onto our nxt property?

thanks again US