hoping soomeone can advise me defaults

sortingmystuffout

Hi I am new here.

In 2006 I was made redundant but I hadnt been there long enough to get any redunancy pay.

I had loans etc that I couldn't afford and missed payments and stupidly burried my head in the sand hoping that they would somehow go away lol yeah right. Wish I had sorted it long time ago but never you live and learn.

Anyhow I have now rectified my mistakes I have a good job and my financial situation has somewhat improved. I have been on a dmp plan for three years now and have always paid the repayments on time.

I have two defaults on my credit file that were issued in 2006. Next year I hope to have paid all my debts off.

Now here is the question. I am currently renting my parents second home which they own outright i.e have no mortgage on it.

I am looking at buying 50% from them in the next year or so i am waiting until my debts are paid as they do not know about them its not there worry its mine. Here is my question once my defaults are satified as they will be 4 or five years old by the time i look at getting the mortgage will this effect my chances of gaining good interest rates seeing as my parents have already put 50 % down payment down . Or if the answer is as I think yes it will effect my credit rating no matter how old they are or how much down payment has been put down ,as they would be 4 or five years old and satifsied would there be any chance of getting the creditors to remove them from my file as this is the only thing that is effecting my credit . I hope that someone will be able to advise sorry for the long post and if this has been done to death .

Bunny_Mad

Hello.
I will try & answer your questions one at a time.
(I hope it is clear enough as I am VERY new to this. Plus its 05.20am & I havent been to bed yet!.
I have worked in finance all my life. Debt recovery/Litigation & most recently Fraud. So these answers are based on how things were...I am unaware of any changes. So i hope this helps.)

Creditors will not & cannot remove any information from Credit reference agenys unless it was put there in error or as a result of Fraud.

Now in relation to your credit rating :
You dont say if you just defaulted on payments, or actually went as far as having legal action taken against you eg.Judgements/CCJs etc?

If it was JUST late payments & NO legal action, the payments you have made since will show whether or not you are a regular & reliable payer. Payments on time = Good credit.

If it went as far as Legal action, that information will remain on your credit file until 6 years has passed. With most Banks & BS's using automatic credit scoring, this will show up & lessen your chances immediately. (Especially in the current climate). They may pass your application through to the Credit Department for a 'human' to assess your rating, but you would have to be borderline (almost perfect) for them to do this.)

IF you have cleared all the accounts that you defaulted on, you need to ensure that the banks have noted the accounts as paid in full/satisfied with the Credit Reference agencys (this can take 6 weeks).
(Ask your old creditor for a letter too, incase any potential new mortgage lenders need to see one as proof, if your file hasnt been updated in time.)

Getting a good interest rate in 4-5 years time... none of us know what the interest rates are going to be like at that time, we cant even guess at what they will be at the end of the year. (I wish I had a crystal ball too.)
Or if creditors (Banks/Building Societys) will be lending as freely as they did in the past few years. BUT having said that, NO MATTER HOW BAD your credit has been, keeping a clean sheet WILL be a GREAT help to you gaining credit & improve your chances. One thing alot of people think is that if they have no credit cards/loans, they will have great credit as they have never needed to lend money etc. This is not the case. Banks need to see that you can spend sensibly & more importantly PAY IT BACK, ON TIME. So even if you just make 1 purchase a month on a credit card & pay it off immediately (so you dont get any charges) it will look good on your credit file.

Now back to the mortgage.....
Are the deeds of the house going to be registered in your name only?
Or remain in your parents? or all three of you?
Basically you cannot get a mortgage on a building which is not in your name.
The other thing is the bank will not take your parents owning half the house, as the 'deposit'.
Your parents (as there names will be on the deeds) can remortgage (cant be classed as a new mortgage as its a release of equity) the house (so long as it is owned outright or the other creditors with charges on the property are informed/involved). But the mortgage would be in their names.
If your name (only) is on the deed, you could do the same, so long as your credit was good & your have sufficient income to pay it.
If all three of you were on the deeds, I have to be honest... I really dont know! ### Perhaps someone else out there can help us on that one, please?? ###

(I am in the process of releasing equity in our home, myself & although there is nothing secured on our house, because I paid the mortgage off in full, but we are staying in the same house they will not call it a new mortgage, because it is a release of equity it is classed as a remortgage.)

I hope this readable & has helped in some small way.
Good Luck & KEEP PAYING ON TIME...it WILL improve your chances.
Good night. :0)