Mortgages

[Gavin]

A friend cannot get one for a cheap house. They have paid rent for a decade or more which has been higher than a mortgage.

I thought about buying it to rent to them with a view to them buying it from me once their credit rating improved but apparently buy to let is a 25% deposit.

Up yours lenders!

[duncs500]

Why is their credit rating so bad?

[Gavin]

Why is their credit rating so bad?

always lived in rentals, never had credit. 3 years is the longest they have ever lived anywhere. I get that credit ratings are a thing, but if you can afford rent, you sure as shit can afford a mortgage on the same property

[Rich B]

Why is their credit rating so bad?

always lived in rentals, never had credit. 3 years is the longest they have ever lived anywhere. I get that credit ratings are a thing, but if you can afford rent, you sure as shit can afford a mortgage on the same property

how much deposit do they have? That's usually a good way to mitigate the lenders risk.

[Swervin_Mervin]

We've had a nightmare getting extra borrowing despite decent earnings, a low LTV etc.. In fact we're still waiting after a good couple of months of wrangling! We've had a mortgage for 20yrs now and no missed payments. We've been overpaying 25%/mo for 2-3yrs now as well.

The amount we want would cost less/mo than those overpayments even and yet it's still proving problematic because of me being an owner/director.

[mr_jon]

Lots of ways they can build their credit rating and - without any harshness intended - they should have been doing this for the last couple of years if they intended to buy. The missus had a crap credit rating but is in the 970's now with Experian on very basic credit terms like a card and phone.

I'm certainly glad I'll not have to go through that rigmarole ever again.

[Simon]

Are they registered to vote?

[dinny_g]

Are they applying themselves or using a broker???

[Gavin]

Deposit would be almost nil I think, but I think they were told "if you ha 5% or whatever, still a no". Will suggest using experian or similar though, that's a great shout.

[Rich B]

Deposit would be almost nil I think, but I think they were told "if you ha 5% or whatever, still a no". Will suggest using experian or similar though, that's a great shout.

They don't have any deposit? What happens if the market goes down and/or they lose their job? It then becomes the banks risk.

[dinny_g]

Or Interest Rates go up ???

In rental accommodation, they can always move if the landlord raised the prices the rental but they can't do that with a mortgage.

I feel for your friends Gav but I think you've answered your own question.

I'd still get a Broker involved as they're the experts in finding products. It might be sub prime level with crazy interest rates but they'll find a deal if they really want to buy.

[V8Granite]

I’m amazed they even let them in to discuss it if they have no credit or deposit.

They are a very high risk for the bank.

Dave!

[GG.]

Well this was a pointless thread! Couple with no deposit can't get a mortgage non-shocker.

Banks haven't lent at 100% LTV for 13 years. 95% mortgages are available only in limited circumstances and most banks would have a cap on how much they will lend at that level (same for salary multiples on an affordability basis).

[duncs500]

I’m amazed they even let them in to discuss it if they have no credit or deposit.

They are a very high risk for the bank.

Dave!

Sadly this. They need to make a proper plan involving saving for a deposit and building up their credit rating. Being able to afford the rent each month is not enough.

[Jimmy Choo]

Well this was a pointless thread! Couple with no deposit can't get a mortgage non-shocker.

Banks haven't lent at 100% LTV for 13 years. 95% mortgages are available only in limited circumstances and most banks would have a cap on how much they will lend at that level (same for salary multiples on an affordability basis).

I struggled to get a 90% mortgage last year. I managed it but I'm paying slightly more than I wanted as I could only get 3.09% (fixed for a length of time that I can't remember)

[GG.]

Even that's pretty good! My first mortgage was not that long ago (8 years?), i.e. when rates where already low... and that was 4.19% at 90% LTV

[Holley]

Yep 95% mortgages is the lowest you can have, but clients need to be credit healthy.

@Swervin_Mervin Have you tried Coventry? Some Building Societies take into account your net profit as well as salaries/dividends for limited company owners.

[Gavin]

Well this was a pointless thread! Couple with no deposit can't get a mortgage non-shocker.

Banks haven't lent at 100% LTV for 13 years. 95% mortgages are available only in limited circumstances and most banks would have a cap on how much they will lend at that level (same for salary multiples on an affordability basis).

No, this is me moaning in a moaning thread as I wanted to moan. I know why they cannot get one, I worked in a bank and know they are a high risk, I just think it is crap.

I wasn't looking for solutions or dickish answers, but true to form...

[Swervin_Mervin]

Yep 95% mortgages is the lowest you can have, but clients need to be credit healthy.

@Swervin_Mervin Have you tried Coventry? Some Building Societies take into account your net profit as well as salaries/dividends for limited company owners.

This is just for extra borrowing hence we're dealing with our current BS. They supposedly take into account net profit, but the fact our 2nd year profits were down on the 1st year (still very, very decent though) they took as an excuse to say they couldn't take my earnings into account at all. I've had to go to great lengths to explain the reasons why (mostly because we paid 1st year pensions and 3mo of salary out in our 2nd year). I'm still not convinced they're taking my earnings into account as they seemed more interested in additional elements of the wife's remuneration package

[GG.]

Well this was a pointless thread! Couple with no deposit can't get a mortgage non-shocker.

Banks haven't lent at 100% LTV for 13 years. 95% mortgages are available only in limited circumstances and most banks would have a cap on how much they will lend at that level (same for salary multiples on an affordability basis).

No, this is me moaning in a moaning thread as I wanted to moan. I know why they cannot get one, I worked in a bank and know they are a high risk, I just think it is crap.

I wasn't looking for solutions or dickish answers, but true to form...

Your first post omitted the most salient piece of information wasting peoples time by getting them to suggest answers which won't work. Mirror, reflection, my friend.