Mortgage...bad credit

Hi

I already have a mortgage (shared ownership) with my local authority. It is just in my name. I have a bad credit history that has stayed with me untill just recently when I finally manged to pay off existing debts.

My partner and I have now located an excellent property that we want to purchase and I will sell my house to help with the finance.

Initially my partner was going to get the new mortgage (as I have bad credit) and both our names would be on the deeds of the new property but I have now been told by a solicitor that you can't have one name on the mortgage and two names on the deeds....

Our other option is for both if us to apply for the new mortgage...but with my bad credit is that going to affect the repayments even though my partner has a perfect credit history?? I will also be waiting for my house to sell.

I should mention also that my partner is self employed and works for cash so the lender would be probably START mortgages?

Any advice????

Thanks in advance...

anniem said:

my partner is self employed and works for cash

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What exactly does this mean - especially with regard to tax etc.?

Not even a subprime company will look at someone with bad credit who can't prove some source of income....


by cash do you mean off the books with no tax or something else ?

He has no certified income as such. He lodges money into the bank every week and the lenders use this as proof of income. He has to show that he can make repayments.

He doesn't pay tax! Not ideal I know.

You're best option is to go "specialist" and once your impaired credit clears and your husband obtains audited accounts, you should have no issues switching to a prime lender.

Start, Nua, Springboard, Stepstone, Fresh & GE Money are the lenders for you.

He should budget for paying tax and interest/penalties on undeclared income at some point in the future since the chances of being caught are not insignificant. Obviously there'll be no owner occupier mortgage interest relief for somebody not paying/evading tax. Buying the house could feasibly put this anomalous situation on Revenue's radar.

All of the lenders Jonathan O'B mention should do it.

All he has to do is self cert his income, get his accounts sort out and remortage back to prime 12/18/24 months - depending on lender - down the line.

Anyone who works for cash these days is an idiot. Revenue will always catch up with them. It may take a few years, but they will - remember the surprise our Ansbacher evaders got 10-15 years after the event?

Revenue have profiling computers which sift thru data identifying likely evaders. You take out a mortgage, but have no taxable income - instantly on the radar. You are not unemployed/student and not paying tax - instantly on the radar. Even things like going on regular foreign holidays and/or having a credit card and not paying tax - again instantly on the radar. There is so much info that is held in electronic form nowdays, that it takes seconds for a profiling computer to flag something.

As the interest and penalties are generally higher than inflation, to Revenue, the tax evader who is waiting to be caught is like a high interest investment waiting to mature - clocking up more and more income for Revenue the longer they leave it. Revenue's approach to tax evaders is to bring in categories of similar evaders in batches once every few years - this policy tends to give cash workers a false sense of security as after a couple of years of no contact from Revenue, they think they are getting away with it.

"Revenue have profiling computers which sift thru data identifying likely evaders."

I wondered about that and it certainly makes sense- all Deeds for all property have to/should go through the Revenue for noting and you always need the PPS numbers of all the parties. Its not rocket science to pick up a non tax payer buying property. Maybe they ( tax evaders) could get away with not stamping the Deed ( which will just leave a huge penalty at some later stage down the line) but if they are getting a mortgage, the Deed has to be stamped and registered. Unless you're unfortunate enough to be dealing with one of the currently being investigated bad apple solicitors.

And I also wonder with the current slowdown, are lenders getting more choosy again about who they lend to? I would have thought that lending to someone, who works for cash where there is a certain inevitability about a Revenue issue, was financial suicide.

mf

mf1 said:

"Revenue have profiling computers which sift thru data identifying likely evaders."

I wondered about that and it certainly makes sense

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As far as I know in recent years Revenue have been using more automated data mining techniques to profile all taxpayers (businesses, self assessed and PAYE) to identify and target for investigation/audit cases that most likely yield the highest benefits for the lowest costs.