Mortgage advice

swlabr1982

Hi,

I'm hoping someone can help me or atleast give me an idea of what to expect. I am currently on a CCCS debt management plan to pay off over £15k worth of debt. My aim is to save for one year with my girlfriend so we can buy out first house. Neither of us have ever had a mortgage just alot of needless unsecured debt. we're both paying it off and are looking for the best way to get a reasonable mortgage in about a year after paying off our debt.

We are hoping to save around £12k between us as a deposit but wondered would we actually get a mortgage and how much would our credit history effect our rate for borrowing or effect our chances of getting one? We're only looking for a house of £70k so about £10k would be used as a deposit and the rest for fee's etc.

I hope someone can give use an idea of what to do to put us in the best position for a mortgage once we are debt free and on our way to recovering our credit history.

Sorry if this isn't the right forum but I saw mortgages and put two and two together

getmore4less

My aim is to save for one year with my girlfriend so we can buy out first house. Neither of us have ever had a mortgage just alot of needless unsecured debt. we're both paying it off and are looking for the best way to get a reasonable mortgage in about a year after paying off our debt.

We are hoping to save around £12k between us as a deposit

So you are on a DMP and expect a deposit of £12k in one year

do those creditors that have frozen interest know this?

How come you know you will have so much free cash so soon after being unable to pay your debts on DMP

Conrad

You will need at least 30% deposit. It is possible to get a mortgage but the DMP can be a big issue for example where a mortgage provider may insist the creditors under the DMP are asked for writen consent for you take on further borrowing.

swlabr1982

getmore4less wrote: »

So you are on a DMP and expect a deposit of £12k in one year

do those creditors that have frozen interest know this?

How come you know you will have so much free cash so soon after being unable to pay your debts on DMP

Maybe I haven't explained this clearly. I'm not daft enough or rich enough to pay £600 a month to a DMP and save at the same time. This will be once the DMP if over and I no longer have ANY debt to any creditors. I will then save the money I currently pay out to my DMP and still live as I am now (scrimping and saving in my bedroom at my parents). This will also be the case for my girlfriend.


30% you say? Wow, I'm not really suprised to be honest. Is there a way I can realistically improve my credit rating once being on a DMP that would put me in better stead for a mortgage?

Thrugelmir

swlabr1982 wrote: »

30% you say? Wow, I'm not really suprised to be honest. Is there a way I can realistically improve my credit rating once being on a DMP that would put me in better stead for a mortgage?

Smaller lenders (i.e. building societies) have a more flexible approach to underwriting. So once the DMP is cleared. Saving regularly with a local BS may help your cause.

Loubylou2

I'm not sure but I think if you can get the creditor to show your debt as 'satisfied' it is slightly better on your credit rating although not sure under which circumstances they will do this. As you know the 6 year rule about defaults will still stand though.
Others will be better informed about this.

swlabr1982

Thrugelmir wrote: »

Smaller lenders (i.e. building societies) have a more flexible approach to underwriting. So once the DMP is cleared. Saving regularly with a local BS may help your cause.

My girlfriend and I have discussed this and we both bank with NatWest and were thinking about setting up a joint savings account and transferring our savings to it each month so when applying for a mortgage a paper trail will be available to NatWest to see when we applied for a mortgage.

Would a credit score better itself if we applied for a high interest credit card and used that for daily purchases and paid it off all at once each month?

Thrugelmir

swlabr1982 wrote: »

Would a credit score better itself if we applied for a high interest credit card and used that for daily purchases and paid it off all at once each month?

Personally I would consider not to. As you need to convince a potential lender that you realised the error of your ways. So by demonstrating that you can manage your personal finances in a responsible manner would aid your cause.

swlabr1982

Thanks for the replies so far. Any other suggestions or advice on how to put myself in the best position for a mortgage after a DWP has been fully paid?

Conrad

swlabr1982 wrote: »

Thanks for the replies so far. Any other suggestions or advice on how to put myself in the best position for a mortgage after a DWP has been fully paid?

Save, stay at same address, same employer, bother to vote etc - in other words act like a nerd - lenders truly like that.