How it started, I have always dreamed of owning my own home, so I would not constantly have a dead money bill each month and to provide financial security for my family even though it is a big challenge to take on some debt and have a plan to pay it off its also a goal achieved.
I was in my mid 30’s and time was slipping away despite having been a good saver for many years there was something that came up that needed to be paid for or that odd emergency that had to be resolved quickly. I was stunned when the company I had worked for as a senior manager was going into administration but thankfully I was included in a group of employees who were protected by Transfer of Undertakings (Protection of Employment) regulations which meant even though I was going to be made redundant either way I was given a fair redundancy payment and some additional owed wages before the company closed.
Being struck with many thoughts at this point, where am I going to work? should I take time off work? should I start a business? Inevitably I took 4 weeks off before seriously looking for jobs, the offers for interviews were slow, to begin with, but they came in thick and fast afterward, I ended up taking a management job in my local shop despite offers to work in a similar roles I had done in the past included some quite well-paid jobs. For me I needed to take a step back be closer to home and have the flexibility to be able to work around family commitments although retail management is highly demanding it has more of a work-life balance than working 50-60 hour weeks for a company where you have no home life.
This left me with a sizable amount of capital that had not been earmarked for anything else.
The search for a new home
Thankfully the housing market is quite open at the moment there are lots of homes available at lower prices than seen in previous years. I viewed a few properties that looked suitable for my family’s needs and made a few offers, ultimately the first choice home I wanted I was outbid considerably and had to look elsewhere. I was not disheartened by this as it obviously was not meant to be.
But after a few more viewings I found a home that was the perfect space and in a great location. The only challenge I had was getting a mortgage for the remainder.
The mortgage challenge
I knew it was going to be difficult for me to get a mortgage as I had just started a new job within the last 3 months, and most high street lenders require a 6-month history of continuous employment (maybe I shouldn’t have taken that few weeks off work). I also had some missed credit card payments and adefault on my credit file from 4 years ago, although I can safely pass the majority of credit checks, this did mean I had to get a mortgage broker to arrange my mortgage and although there’s a cost to this it was 100% worth it to achieve my goal. Mortgage brokers can charge anywhere from £450 to £2000 to arrange a mortgage this is usually based on a 0.35% of the property value but most will have a minimum spend to arrange .
So yes it is possible to get a mortgage with missed payments and defaults on your credit history, but this will be based on age of debt and the amount that was owed. This is generally the same if you had a debt management plan, however I have never had a Debt Relief Order, CCJ, Bankruptcy order or IVA, most lenders will not lend to people who have had these in the past 6 years but it’s not impossible but you would need to speak to a mortgage broker and they can take into account the factors the age of debts, amount of deposit, whether the matters have been settled even if they can’t help you straight away they certainly advise you what to do to put the situation right.
What type of mortgages was I able to get?
Firstly I was offered an adverse credit specialty mortgage but by the end of the process I was able to get a mortgage directly with a high street bank, the process was really simple I provided a few statements and some ID, and they did a credit a check and offered the mortgage in principle, which I was ecstatic with the mortgage despite being a higher percentage of APR and higher payment each month than seen a couple of years ago, it was still cheaper than my rent. (There was also the added bonus of cashback on completion).
The final offer and mortgage approval?
I made the offer to the estate agent well under the listing price knowing they would come back with what they actually wanted for the property, they came back saying they would be happy with roughly nearly 10% under the asking price, result! the mortgage then went to the valuation stage which I was confident with as I know the properties in that area generally sell for a lot more, this took around 2 weeks and then I got a text saying the valuation had been completed and approved this was swiftly followed by a phone call (within 10 minutes) to say the mortgage had been approved.
It’s not over yet but yet but now I just need to wait for the conveyancers to complete their work.
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That’s my mortgage journey so far, sign up to my mailing list for more. – Money Lad
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