Mortgage application with bad credit

E

Europa 24

New Member
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Not sure if this is the best section of the site to ask but here goes.
Living in a house wife bought . Currently around 50k left on the mortgage and worth around 310k so 260k equity.
She has a bad debt with AIB for 11k from an old loan before we met.
We're now looking to sell up and borrow around 100k to add to the equity and buy a house.
We earn 92k between us and both secure jobs in the civil service and Council. My wife's credit rules us out with lenders, but what other options are there in this situation?
Thanks in advance
 
First thing I'd do is get wife to check record in the Central Credit Registry with CBI or has this been done?
 
WizardDr said:
First thing I'd do is get wife to check record in the Central Credit Registry with CBI or has this been done?
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Yes and the AIB loan is there. I was thinking of trying to get a 100k loan myself but not sure how feasible this is.
 
First thing to do is for your wife to repay the loan!

She should have done this years ago and you would not face any problem now.

Think about it! Would you lend to someone who chooses not to repay their loans? You would be mad to as they might choose not to repay the loan you give them.

Brendan
 
Brendan Burgess said:
First thing to do is for your wife to repay the loan!

She should have done this years ago and you would not face any problem now.
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While I agree with this I wonder will it sort the problem out though. Because paying it back doesn't expunge the record immediately.
 
No, but they will be able to trade up in 5 years.

And it's the right thing to do to pay your debts.

Brendan
 
Debt was paid back in full last year. No other loans or credit cards. Probably just end up getting the loan myself.
 
Bronte said:
While I agree with this I wonder will it sort the problem out though. Because paying it back doesn't expunge the record immediately.
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It won't, but it will mean the loan will appear as repaid rather than pending on the credit register. If the wife is also a legal owner of the home it would be very difficult, if not impossible, for you to borrow only in your own name. Bear in mind also that applying with her now links you to her record and this may appear in future credit searches for you. Just get her to pay off the loan and it will at least appear as repaid. They only hold the last 2 years of info on loans so in 2 years time all that will be left is the final repayment (though I think it may still indicate as having previously been in arrears). After a certain time everything fully paid off drops off completely.
 
Europa 24 said:
Yes and the AIB loan is there. I was thinking of trying to get a 100k loan myself but not sure how feasible this is.
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Its not feasible if it is the family home as her name will be on the deeds or she will have a legal claim to it even if you originally bought alone.
 
Presumably the amount paid off the house up front and what will be owed compared to the value, means the loan is not as exposed.
 
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The experience of lenders appears to be that some people just don't like repaying loans when the going gets tough.

And it's impossible to repossess in Ireland.

So having a low LTV is better than a high LTV but still not much comfort if the person chooses not to repay.

Brendan
 
Well in this case the loan was fully repaid. And lenders seem much more free with lending it seems when times are good and both have secure jobs.
They also seem to write off large amounts of debt by taking settlement payments which I find crazy. Maybe also an Irish thing.
 
Brendan Burgess said:
It was an "old loan" which she only repaid last year when the prospect of borrowing again appeared on the horizon.

Sorry, but I would not lend to someone who considers repayment of loans optional.

Brendan
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Well lenders nowadays are obviously a lot more forgiving it seems. Quite the Christian bunch when it suits.
 
Have you approached any banks? There is no blanket rule that says just because you have something on your credit record, you can't get a loan. Especially on unsecured debt. It's paid back and you have no other loans. She might need to explain why it took so long to pay it back but she might well have a very valid reason.
For a mortgage, your best bet might be to approach a broker who will be able to present your case with the bank. Be upfront from the start. It will require some time and effort but would imagine at least one of the main lenders would be willing to look at your application.

One thing to note is that if you have already approached multiple lenders and they have refused on the back of credit check, then other banks can see that you have approached other lenders. It becomes more difficult. That's why I suggest using a broker. They will also be able to advise on going ahead by yourself.
 
Thanks, that's pretty much what we've done and it's sounding much more positive than we first thought.
There was a very good reason at the time why the loan fell behind and it was eventually paid in full. Existing mortgage never missed a payment and I have zero loans or credit cards. With the 2 secure jobs and the low LTV, it looks like I may not need to apply alone after all.
Luckily we hadn't previously applied anywhere else yet either so no refusals on record.
 
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