Will poor credit rating affect our joint mortgage application?
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My partner and I would like to buy our first home together. We’ve saved up for a deposit and we both earn a decent salary, so I think we should be able to get a mortgage. However, my partner got into dreadful credit card debt six years ago and so has a bad credit score. Will we be able to get a joint mortgage or will it have to be just in my name?
Diane Fish of Smith & Pinching responds:
Be concerned, but do not worry as there is likely to be a way to resolve this. There’s no denying that a bad credit score will adversely affect the availability of a mortgage. However, taking out the mortgage in just your name will mean that all the affordability checks will be based on just one income, not two, so may limit the amount that you can borrow.
Lenders obviously prefer both applicants to have a good credit score, but where there is a situation like this, they will look at the full picture and base their decision on this. This means that in some situations it will be harder to find a good deal for you – but there are specialist lenders who are prepared to look at people with a lower overall credit rating, depending on what has caused it and how long ago the problem occurred.
If your partner has had no issues since his episode with credit card debt six years ago, lenders may be less judgemental. The lender will want to know if their debts have been paid off now and, if not, if there is a repayment plan in place.
The size of your deposit will help – the larger the better. In addition, lenders will look at your age and factors such as your employment status and how long you’ve been in your current posts. It’s undeniable that you are unlikely to get offered the very best rates, but a good deal should be possible to get you on the property ladder.
I strongly advise that you talk to an independent mortgage adviser who will be able to look at your specific circumstances and work out which lenders are likely to make you an offer.
Your home may be repossessed if you do not keep up payments on your mortgage. There will be a fee for the mortgage advice. The precise amount will depend upon your circumstances, and the type of lending taken. Smith & Pinching’s minimum advice fee is £950. Any opinions expressed in this article do not constitute advice.
For more information, please visit www.smith-pinching.co.uk