Are we likely to be able to get a mortgage?

giggsy07

Dear all,

I am 25 and a fully qualified chartered surveyor earning approx £30,000 basic salary at present.

I currently have approx £9,000 debt on credit cards (no payments missed within last 24 months). I also have about £5,000 on a car loan which has never had any payments missed. I do have a default on my account from approx 2006 which was eventually settled on a mobile phone account - I did complain about this but it was unable to be resolved.

I am expecting to clear my £9,000 credit card debt completely with bonus in April. This will leave me just with my diminishing car loan at an affordable payment of £200 per month.

I live with my girlfriend who is a buyer and earning approx £25,000 basic salary. She has an excellent credit history. We are renting at £600 per month and have never missed a payment or been late for well over 18 months.

We are planning to potentially buy our first house within 12-18 months and hope to have a deposit of approx £40,0000 for purchase of a house between £180,000-220,000.

We will be applying for a joint mortgage and therefore combining our salaries (income of over £50,000 per annum). My girlfriend will have minimal outgoings to credit (if any) and I will only have my car.

If I keep up with all my payments and clear my debts in April (approx 8 months before we even begin to apply for a mortgage), then should my slightly adverse credit history affect our application or do you think we should be okay?

Many thanks in advance for any advice or comments.
giggsy07

Senior_Paper_Monitor

Placeable, but only with certain lenders (in current environment - which I think is unlikely to change in immediate future).

I recommend you utilise a broker to identify suitable lenders (it is the sort of case we would expect to discuss at BDM level pre-application).

JasX

You'd probably find much better deals available to you if you wait 24 rather than 18 months for the default to hit the 6 year anniversairy and drop off you file, otherwise advice as above

giggsy07

Thanks guys. Just double checked my credit report and the default was November 2005 and so 6 years will be up at the end of this year. Will this automatically drop off or will I need to contact Experian and Equifax?

My credit score is fair (very near good), despite the default and so therefore if I clear all of my debt (i.e. pay off credit cards to max) and keep up payments on everything then I should hopefully bump up to the good rating and potentially even excellent by the end of the year. This should be good timing for our mortgage applications.

With any luck also my salary should increase by £5,000 or so which will help.

I will then be left with a £1,500 available o/d limit, current account in credit for a well over 12 months, plus approx £12,500 available credit on credit cards.

Experian_company_representative

The default will drop off your report as soon as it is six years old. If you do apply for credit before then, make sure the default is marked satisfied on your report.

James Jones

dimbo61

you talk about available credit ( thats debt to you and me) so much better to build up your savings and pay off any debts as the bigger the deposit the better LTV