Planning the mortgage of the future

kaostheory

Hi All,

I am 24 and wife is 21 with a 2 year old daughter. We have recently started thinking about buying our first house. I have had some financial difficulties in the past and had 2 defaults against my name ( both satisfied 1 late last year 1 jan this year and both less than £500 ) I have a £500 overdraft on my single account with natwest and my wife has a credit card with lloyds and I have recently ( last week ) got a capitol one credit card. The reason we are looking is because i have now got my career to a point where i earn decent money and am able to save. Here comes the other issue.. I'm an IT contractor using an umbrella company for my taxes/NI I take home on average £1050 a week after deductions. We would ideally like a house around £180k total value

Basically my question is how would i be looked upon in terms of a mortgage app and what are my next steps/time frame for improving my credit eligibility?

Thanks in advance for any help - I'm clueless

Rhys

kaostheory

Sorry Vanquis card not Capitol One with £250 credit limit. Also i know its the wrong forum but instead of creating another thread whats the best way of paying that of every month? DD or payment when i receive the bill?

VIGILANT22

Re Credit Card...DD then you will be payments will be made on time....(all commitments should be paid by DD to avoid late payments.)

Having a Vanquis Card suggest yr credit file in impaired.
Obtain a copy of yr credit file from Experian/Equifax etc...this can be done online......
Anything recorded on your credit file remains there for 6 yrs
At the moment it is very difficult to obtain mortgages with any marks on the credit file....also you would require a deposit...

kaostheory

Thank vigilant, I already mentioned 2 defaults on my credit file. So basically i need to wait 6 years before applying for a mortgage is that what you are saying? I know i need to get a deposit and have recently started saving. Just looking for some advice as to best next steps and practices to follow to improve my chances.

VIGILANT22

Nobody can say today what the lending will be of tomorrow.
Going back to 2007, you would probably have qualified for a mortgage no problem.....However, those lenders who dealt with clients who have impaired credit have all disappeared from the market.

It could be as time goes on and adverse lenders return to the market you would be considered...or it could even be in a few years time your own bank would consider you if you could demonstrate good conduct on your credit file...

Keep everything on DD....Use that Vanquis Card as little as poss...(check the APR)....Who do you bank with?

dimbo61

Tips on how to build up credit score!
Get on the electoral roll at your current address ( then you can vote)
Pay all CC bills by DD each month and dont overspend.
Save ,save and save as much as possible
Bigger deposit more chance of getting the mortgage
You might not have to wait 6 years but build up savongs and dont damage your credit score anymore by missing/being late with payments.
Consider size of mortgage 3/3.5X size of income !

kaostheory

My joint account is with Lloyds TSB and my single account is with Natwest. I was planning on using £200 p/m on the card and paying off in full every month is this a good idea? I am planning on saving £1500 - 2000 a month. Also how will me being a contractor using a umbrella co for tax/ni work out when applying for a mortgage or providing records?

I am on the elctoral register, I have a credit expert account which I check regularly.

The APR on the vanquis card is something stupid like 39.9% APR but from reading around i saw that you need to get a "bad credit" credit card and maintain the account well for a while to improve your credit file.

With my circumstances how much deposit should i be looking at before even thinking of applying for a mortgage for a house of £180k?

VIGILANT22

Think about opening an account with Barclays (read why)

http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=popup1openplanwealth&value=15221

No problem using the card and paying off in full, demonstrates good conduct

Nobody can comment re deposit

kaostheory

That PAML looks good... Any ideas how its worked out?

I will head to my local barclays branch on Monday.

VIGILANT22

kaostheory wrote: »

That PAML looks good... Any ideas how its worked out?

I will head to my local barclays branch on Monday.

Listen. listen...don't get too excited...no way would you qualify for that in a few months!!...However, if you bank with them and "keep your nose clean" they may consider you in the future.......good luck..:)

kaostheory

So in that case am i better keeping with Lloyds and the time spent with them being taken into account when i come to apply or start a fresh with Barclays?