Credit scoring - Mortgage?

fergyxx

I am looking for a little more info to help me understand the way a mortgage is credit scored - i.e. what will go against me etc.

I know that it is largely based around affordability/income/value of property etc. I also know that any defaults on any credit accounts will go against you.

In relation to my own credit report, I have 1 default account (which I am disputing - as I wasn't even aware that I owed the money - the company decided to put this on out of the blue claiming that I hadn't paid them - anyway, that is another matter).

I have 2 or 3 late/missed payments over the last year, which on their own (i.e. without the default) I don't think they would cause any great problems. (but I could be wrong).

Anyway, the main thing that I've got going against me, is that I owe around £4000 spread across various credit cards/loans etc. I have a plan to repay this without spending anymore, and I am not looking for a mortgage in the immediate future.

I just wanted to know if this outstanding debt would go against me if I was to start looking for a mortgage? I plan to repay it first, before I start thinking about getting a mortgage, but I was wondering if I/we had the money for a deposit, whether I could consolidate these debts onto the mortgage and repay them that way - in turn, improving my credit file, and subsequently destroying all of the demon plastics!!

littlechezza

I to was wondering about this, sorry to take over your query but I have a fixed rate which is due to end June 2010, I am currently paying things off with a mortgatge holiday which I hope to have out of the way by Dec 2009, when I remortgage will this go against me?

Snaggles

Hiya - if I was assessing your mortgage, I would just take the minimum payments into consideration as part of my affordability calcultions - so if it was still affordable with the minimum payments included, having £4k of debt wouldn't be a big deal if everything else was okay (credit file, income, account operation, etc).

MurrayMint

Hi,

When I got my last mortgage in 2006, it was explained to me as follows:

total income minus (1 years worth of minimum payments to service existing debt) x income multiplier = how much mortgage you can get

But I don't know what current income multipliers used are. I know they did peak at 5 x, but I think they calculate a little more complicatedly now.

HTH
MM