Best lender for me or wont I get a mortgage?

danielanthony

Hi,

We are FTB's with a joint basic income of £60k looking to buy a £190k house with a £20k deposit + fee's.

I had an IVA in May 2003 and so at the end of this month all record of my IVA and associated defaults will be removed, I have spoken to the CRA's to make sure this happens. Also, my car finance, credit card and mobile phone have all been paid on time since opening them.

So considering that I will have no defaults or IVA on my file, I should be eligible for a mainstream mortgage, right? Do all lenders require you to state if you EVER had an IVA or defaults?

Lastly, my outstanding credit card balance is £6500 with a £7000 limit, would it be best to rent for 6 months to pay this off before applying?

So, considering the above, which lender is best for my circumstances?

Thanks

luckyfool

Did you COMPLETE your IVA in May 2003? If thats the case then it should come off or be about to come off as you say.

Questions - Some lenders do not ask those questions at all (relying on the credit search), and it is arguable with other lenders whether you should need to disclose something over 6 yrs old (in the way that some criminal convictions are "spent" after a certain period).

Credit Card - the fact that your card is at around 90% of the limit can have a big impact on your credit score (negatively), you would be better off with two £3250 balances on cards with 7k limits, at least in terms of credit scoring. If you can wait till you have paid off at least 50% of the balance then you would likely score up better.

When borrowing 90% the lenders currently apply very strict credit scores so you may find it difficult, but it might be worth approaching your own bank to see what if anything they can offer. Who is it you bank with?

Batchy

Youve just come out of an IVA, and you have already built up 6500 worth of credit card debt near enough up to your limit!... who saved up the deposit... your partner? Do you think your ready to take on a 25 YEAR MORTGAGE... OR MORE?

Think about what your doing before diving in and entering a very volotile situation at the moment. I think you should clear your debt and wait until the housing market stabalises and you then can see what it feels like to be debt free, before you wear the ball and chain round your neck as a mortgage!!

Mrs_Bumble

Your IVA won't be removed, it will just show as completed. All the previous credit history will still show as it has to. How much was the IVA for? I don't know of any lender at present that will look at lending, unless as above it was actually completed in May 2003

luckyfool

If the IVA was completed in May 2003 then it will dissappear off his credit file after 6 yrs from that date, i.e. June 2009, he is correct in saying that (if I understood the OP correctly).

Conrad

You mention renting for 6 months. In my experience changing house just prior to applying for a mortgage should be avoided as credit scores tend to be reduced.

Scoring is largely a function of client stability. It is well known to lenders that in general the more stable a clients background, the more likely they are not to get into financial difficulties, as such people tend to be calm, collected, organised and plan ahead. Of course there are exceptions.

It's like when I get a new person through my door and they reveal they have been in job 6 years, lived with parents 28 years, had little debt - I know more or less immediately they will not have a blemmish on thier file, whereas the jumpers and hoppers are much more likely to have had problems by thier very nature.

danielanthony

To clarify, my IVA started in May 2003, so May 2009 will be 6 years from the 'default date' and so all defaults will be removed from my file. I have checked with Experian, Equifax and Call Credit to confirm this is the case. My IVA is only shown on Call Credit and they have confirmed that it will be removed at the end of this month from my file - it is currently 'satisfied'.

I am a lot better at handling money than I was in the past, I had to get an IVA due to loosing my job back in 2003. I earn £42k when taking overtime into account and so my credit card is a reasonably small percentage of this, plus I am paying it off.

I have lived with my parents for the last two years and am registered to vote at that address. My previous address was rented and I was there for 18 months.

I bank with Lloyds TSB and have my current account and my half of the deposit saved with them. Due to various personal reasons (as well as all the nausea involved in referencing fee's and deposits for renting) I would rather use my deposit money to buy a house now and pay off the credit card over the longer term rather than paying off the card now and having to rent for 6 months to build up my part of the deposit again.

Would going to Lloyds TSB be my best bet? Would I be wasting a mortgage advisors time (and any fee I paid them?)

Thanks for the help so far.

Dan

luckyfool

As I understand it the IVA will show up for 6 yrs from the date it finished.

danielanthony

luckyfool wrote: »

As I understand it the IVA will show up for 6 yrs from the date it finished.

Nope, 6 years from the date it started.

See here:

http://forums.moneysavingexpert.com/showthread.html?t=1286063

The CRA's back up what the Fermi says in his guide.

luckyfool

eh, the defaults will disappear off your file after 6 yrs. But the IVA shows under the public information section normally (same as a Bankruptcy and CCJ), and that will continue to show up for 6 yrs from when it was completed.

Nothing in the post you link to to suggest otherwise from what I can see.

Equally, even if you use a lender that doesn't use CallCredit, and the IVA is not showing with Experian and Equifax, then if the lender asks if you have been in an IVA and you "lie", then you are committing mortgage fraud ("application fraud"). If you do declare the IVA and it was settled only in the last year or so then you can wave goodbye to getting a high street lender to do anything on it.

danielanthony

Ok, here is a bit more evidence:

http://www.credit-checker.co.uk/CreditAnswers.asp?partner_id=&page=2

"How long will a Voluntary Arrangement stay on my credit file?

Voluntary Arrangement information is automatically removed from your credit file six years from the original registration date."

Which in my case was registered in May 2003.