Debt free but poor credit rating - can I get a mortgage?

debtfreein2007

Hello! I'd be grateful for any help with my problem.

I *really* need to buy a house, I'm way way too old to be living with my parents (I won't tell you my age out of embarrassment!). Several years ago I picked up a bad credit rating due to defaulting on a number of loans/credit cards due to being unemployed. These defaults are still on my credit reports (I've checked) and will be for a while yet. However, by the end of this year, I will be completely debt free.

I earn around £21000 a year (which is fairly respectable for my area) in a permanent job that I have had for over two years in a large company. I don't have any children and my outgoings are pretty small - I've just been paying off debt really. I should be debt free around November.

My question is, do I stand a chance of getting a mortgage despite my very bad credit rating? I haven't got (and can't get) a credit card or any other credit. I have a basic bank account with Abbey (who said they will upgrade it very shortly). My parents would be happy to act as guarantor if it helps. I probably won't have much of a deposit for a while.

Who should I talk to? If I sit down with someone at the end of this year (when everything is paid off) and tell them honestly that I've had credit problems but that I'm now debt free, will this help?

Any advice on how to get started would be much appreciated.

Thanks to anyone who will take the time to reply.

brannyrhino_2

everyone can get a mortgage but at what price.

A good place to start is by talking too a broker
try
http://www.lcplc.co.uk/

MortgageMamma

Hi there

Yes you can get a mortgage but assessing at what rate/what deposit you mean would mean taking details of individual ccj's/defaults, the dates you got them, the dates they were paid off and the amounts. Only at this point could a broker even begin looking to recommend you something. It is unlikely you will get a 100% mortgage if you wanted one. HTH - also, the link above is for a company called london and country. they are a very large firm of brokers and the emphasis is on sales not advice in my opinon. some people on here think they are brilliant and some people have real problems with them. They are no fee so you have nothing to lose but I doubt you'll get the personal attention and assurance you require due to the sales culture and the sheer volume of clients they get. You would be better off finding a reputable local mortgage broker who you can go see/will come to your home.

HTH and GL

MM

herbiesjp

If the defaults are shown as satisifed then you will be open to better rates - however the actual rates and amounts will depend on your exact circumstances

There will probably be a lender that can help, but you will need to comfortable with the repayments and this new commitmemnt to secured lending. If you start to have problems with mortgage payments then reposession could be possible unlike personal loans or credit cards - so you will need to make sure your have built up the discipline to maintain this new commitment

poisson_2

sorry to jump on the bandwagon, I'm in a similar situation, but there is only 1 bad thing on my file, that was settled 03/2001 so it goes off my file soon. It was disputed debt of £1k for furniture. I need a 95% mortgage any particular companies better then others. Plus once my file is clear how easy is it to switch lender?

Thanks

herbiesjp

In your position you should be able to find a high street lender to place the mortgage with. Run your details past a good adviser first though, rather then going to all the lenders one by one, as an adviser should have a clearer idea of where they could get you the better deals

BarmyBubba

I am having similar problems. Was told I could get a mortgage with my own bank the Halifax. Then they did a credit check and said no (was made redundant in April and missed a couple of my monthly committments.

Anyway, have managed to get one with the Birmingham Midshires bank. They do a more in-depth credit check (even though a HBOS company) and I have been accepted with them. So give them a try.

asandwhen

You wouldnt need a deposit if your buying a council house as they consider the dscount as the deposit - so you should be able to get one without any problems.