Advice-Bad Debts-want to use Start Mortgages

Hi
I have about 11K in debts at the moment that are being paid off to a collection agency , I know I am blacklisted but I have been speaking to a mortgage broker who advised me that Start Mortgages will consider me for one . I wonder has anyone else been through this process and have they had much sucess ,
Look forward to replies

Re: Advice-Bad Debt

Be prepared to pay higher rates now (because of your status) and in the future (i.e. when rates rise).

Are you sure that it's prudent to take out a mortgage now while this debt is outstanding?

If you use the search facility you will find more discussion on Start Mortgages.

dani said:

I have about 11K in debts at the moment that are being paid off to a collection agency , I know I am blacklisted but I have been speaking to a mortgage broker who advised me that Start Mortgages will consider me for one .

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There is no such thing as "blacklisting" - its a myth. However the majority of lenders will take a dim view of your debts and not lend to you full stop (which unfortunately is the same thing).

Secondly "Start Mortgages" are a subprime lender: see this from moving.ie:

Irish Mortgage Lender Profiles - Start Mortgages

Start Mortgages - Lender Profile

Start Mortgages are a new comer to the mortgage market. Their parent company is called Kensington Mortgages, based in the UK, where they have a large portion of the 'non-status' mortgage market.

They are a specialist lender. They offer mortgages to people with less than perfect credit histories and self employed people who need to 'self certify' their income.

They offer both mortgages to home buyers, and remortgages for loan consolidation purposes.

Deposit:
The max loan they will consider offering will be between 70% - 85% of the property value - it depends on a case by case basis.

Rates:
Their rates are not as attractive as other lenders, because people who take mortgages through Start tend to have a higher risk profile, and most of the traditional lenders would not approve them for loans.

However, their rates tend to be among the best from non-status / adverse credit mortgage lenders, and they offer more rate options than their competitiors.

Who will Start Mortgages appeal to?
Start Mortgages will appeal to people who are unable to get mortgage approval from traditional lenders, in particular, people with credit problems and self employed people with difficulty showing their income.

Who will Start Mortgages not appeal to?
Start Mortgages are specialist lenders, so if you do not fall into their niche categories, you will be better off with the traditional lenders.

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And here - from thePost.ie

Borrowers in this market typically pay interest rates of between 4.5 per cent and 8.5 per cent on their mortgages - on average almost double the normal mortgage rate. Sub-prime mortgage lenders offer customers - who may have been turned down by the mainstream banks - the opportunity to buy a home or to refinance expensive debt at cheaper mortgage rates.

Last week, Start Mortgages, the Irish subsidiary of the British Kensington Mortgages, reported results for its first full year in the Irish sub-prime mortgage market.

Start Mortgages did a higher than expected €309millionworth of mortgage business in its first year at what NCB analyst David Odlum described as ‘‘attractive margins of 3.8 per cent’’.

To put that in context, those margins are about three and half times greater than the margins on a standard prime mortgage - a fact that will not have gone unnoticed by the mainstream banks. Interestingly, as much as 78 per cent of the business was remortgage business.

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So expect to pay an extra 200 or more per month on interest alone - if you compare an 8% rate to a normal 4% mortgage, then you'll end up owing an extra 10k per year for the FIRST year on a 250k mortgage - and this mounts annually. That's nearly what you owe right now.

Tough as it sounds - ride it out. Pay off the debts, save for the next 5 years - then buy your house. You won't gain by going to these lenders.

If you can’t afford to pay your debts off at the moment, why would you consider getting into more? Banks don’t have limits on who they will borrow to just for fun, they know you are less likely to be able to pay it back, don’t do it, sort yourself out first and then think about mortgages.

Hey Guys
Thanks for the advice however I was more interested in hearing if any one had been in a simialr process . I am expecting a bonus from work with in three months so I will have paid those outstanding debts off ,we have seen some where we like and are eager to buy , We have already made the decision to go through start mortgages ,has any one been through them

what interest rate do they quote ??????

once your record is clean in 3-5 years how easy is it to exit their mortgage with no penalties and get a proper mortgage somewhere else and save lots of money I am pretty sure.

fixed or variable rate ??

2Pack said:

what interest rate do they quote ??????

once your record is clean in 3-5 years how easy is it to exit their mortgage with no penalties and get a proper mortgage somewhere else and save lots of money I am pretty sure.

fixed or variable rate ??

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According to the article in the post the AVERAGE is "double" the normal rate. And apparently since not all of their customers have "impaired credit" this probably includes people with good credit. So expect to pay more.

There are consequences attached to getting into debt, hard to accept but the sooner you do the better. The biggest of these consequences is the near impossibility of getting credit for quite some time. This has knock-on effects such as not being able to buy your own home but at the end of the day, its something you simply have to get used to.

As I said guys in my last post this debt will be discharged by end of summer ., I have a very good job with a good salary as does my partner ( he has a clean credit history ) so although I welcome you opinions I do intend going ahead with this and have been advised by a credit broker that am certainly not the only one in this boat . I am not going to wait another 2.5 years before buying when I can afford it now .

300k mortgage for 30 years is typical enough in Dublin.

Off To Karls Mortgage Calculator I go

http://www.jeacle.ie/mortgage/

Normal FTB rate around 3.5% so its €1347 a month for that mortgage

The Impaired Credit rate is around 7% so thats €1995 a month to you Dani .

The difference is €650 a month which would nearly pay your rent until you cleaned up your record . Ouch . It matters not a whit how good yeer jobs are if the ICB has data to show that you are a risk.

I still fail to see why you are rushing headlong into this and you never answered my question on your exit options in 3 - 5 years because you had not thought of that either it seems or had read the literature or wish to tell us the bad news in there maybe.

I would normally say 'good luck' but I will make an exception of it in your case because you are either stoically avoiding reality or you are selling product for Start

Consider also that mortgage rates are rising currently and every 0.5% would add roughly 100 Euros to the repayments at those interest rates.

Guys-I think that the downsides of using a sub-prime lender have been outlined enough at this stage.

The OP has asked specifically for info on Start, i.e. what they are like to deal with etc. so let's leave the rest of the thread open to that issue.

Thanks.

Also I had seen that Start offer mortgages at a rate of 3.8 not 7% . So I do take on board what you are saying and isnt our ability to pay now a consideration also

dani said:

Also I had seen that Start offer mortgages at a rate of 3.8 not 7% . So I do take on board what you are saying and isnt our ability to pay now a consideration also

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Have you actually been offered a rate of 3.8% at this stage?

dani said:

Also I had seen that Start offer mortgages at a rate of 3.8 not 7% . So I do take on board what you are saying and isnt our ability to pay now a consideration also

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don't foget you will need a heafty despoit.... around €50k

Where is the 50 k coming from . we are looking at property for 264 K and have a 10K deposit already ( and yes I know you are all going to say why dont I use that to pay of the debt ) but its a joint savings and am not going to make my bf pay for my silly mistakes .

Bad Debts-want to use Start Mortgages

dani said:

isnt our ability to pay now a consideration also

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not really otherwise you would be with a normal bank at 3.5% .

Start Are Owned by Kensington so [broken link removed]ots of info on them and on their sector in the UK. Sub Prime lending is newish here . Start and GE Capital are the two biggest one IIRC and maybe the Nationwide as well !

Note the following *

*They may have swingeing early redemption penalties of up to 3 years interest if you leave them to get a proper mortgage when your ICB record is unimpaired in 3-5 years .

*They normally do not allow you to pay more than a fixed amount (fixed by them) every month or will take the money and not credit your account but 'suspend' it . You will not be allowed to overpay your mortgage in effect.

*The FACT you are WITH start/kensington will attract the wrong sort of attention even after your ICB debt record is cleared although you can then try to explain it was your then employment record that was the issue.

*Start pay brokers an exceptionally handsome commission , compared to a bank or building society. Therefore brokers are very inclined to recommend them .

As you are medium adverse (their terminology) you will pay around 7%. Can your bf with his "very good job " as you put it ...... not get a mortgage on his own and ye can remortgage in 3 or 5 years to add your cleaned up name to the property ???? People with a "very good job" and a clean record can normally get a €250k mortgage on their own.

Back on Karls site I goes to crunch numberos .

250k Mortgage Over 30 Years

1. Normal Lender 3.5% €1122 per month
2. Sub Prime 7% €1663 a month.

Having your name anywhere on that mortgage will cost your household €551 a month every single month .

So why not wait ??????

dani said:

Where is the 50 k coming from . we are looking at property for 264 K and have a 10K deposit already ( and yes I know you are all going to say why dont I use that to pay of the debt ) but its a joint savings and am not going to make my bf pay for my silly mistakes .

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For your deposit.

Who is asking for a 50 K deposit

from the post above - quoted from moving.ie

Deposit:
The max loan they will consider offering will be between 70% - 85% of the property value - it depends on a case by case basis.

jammacjam said:

from the post above - quoted from moving.ie

Deposit:
The max loan they will consider offering will be between 70% - 85% of the property value - it depends on a case by case basis.

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was working from a €300k house and above....