How much could we get?

DanielleR

Hiya,

My fiance and I will soon be looking to buy a house.

I've spent an age clearing a mountain of debt and currently on my credit file I have
1 Default - £60 but satisfactory
1 Overdraft which is £500 in credit and has had 3 late payments in 24 months
1 Credit Card which is below the limit by about £600 - 3 late payments in 24 months.

I'm currently slowing sorting through things but I'm getting there day by day.

I earn £18,000 per annum. For outgoings I'm currently paying £500 towards my debts to get them cleared by October. I can cut back on this and my minimum payments are about £100.

Other half is awaiting his full contract and a load of back pay. He will earn with basic wage and guaranteed overtime about £30k per annum.

He has a spotless credit record and no debts.

We have a deposit of £40k.

Will we struggle with my credit rating (Currently in the 400's, hoping to bump it up a few 100s in the next few months)?

What sort of amount will we be able to borrow jointly and if my OH's in on his own?

Thanks so much. We're playing around with the figures at the moment and trying to work out what we can do. We want to buy a house to be our home for 20 odd years, not just a first time buyers flat.

dimbo61

1 Default - £60 but satisfactory
1 Overdraft which is £500 in credit and has had 3 late payments in 24 months
1 Credit Card which is below the limit by about £600 - 3 late payments in 24 months
This is all bad news and the way you have put this information is confusing!!!!
Better I have a CC card with a limit of £5,000 and current balance is £4400 so thats what you owe!
Go and see a "whole of market mortgage broker" and carry on paying off your debts as fast as possible
Do not miss or be late in paying any bills for the next 25 years and good luck house hunting its a buyers market and you MAY have a good deposit ( dont know where you live and property you want to buy)

slummymummyof3

Probably not the best idea in the world for your fiance to be linked with you financially as things stand.

opinions4u

How much could we get?

Perhaps it's better to work out how much you can afford, work out how big a mortgage that would get you if rates were 10%, and then go and see a broker to see if you can get one.

I'd also suggest paying all your bills on time for at least a further 12 months and trying to save a bigger deposit before progressing. Late payments and defaults, however small, look pretty awful to a lender when you're asking them to lend you money for the biggest financial commitment of your life.

DanielleR

The thing is I'm currently disputing the default as it was for a service I had tried several times to cancel but they just wouldn't cancel it. I didn't even know it had gone to default until I logged onto Equifax (I never received a default notice, a bill or anything!)

At the moment I have about £3,500 left of debt should be debt free by October. The late payments were about 2 years ago and having spoken to someone at my bank they should drop off soon.

At the moment my partner is really gearing up to get a mortgage in about April/May time and I don't want to be in a position where I'm not on the mortgage, not on the deeds or anything. We are getting married so it's less from that point but more about paying my way. Aside from paying out to clear my debts at the moment we have no other outgoings.

DanielleR

dimbo61 wrote: »

1 Default - £60 but satisfactory
1 Overdraft which is £500 in credit and has had 3 late payments in 24 months
1 Credit Card which is below the limit by about £600 - 3 late payments in 24 months
This is all bad news and the way you have put this information is confusing!!!!
Better I have a CC card with a limit of £5,000 and current balance is £4400 so thats what you owe!
Go and see a "whole of market mortgage broker" and carry on paying off your debts as fast as possible
Do not miss or be late in paying any bills for the next 25 years and good luck house hunting its a buyers market and you MAY have a good deposit ( dont know where you live and property you want to buy)

To put it a little bit more clearly....

I have a credit card with a limit of £2,600 and I currently owe £1990 on it. I have an overdraft of £2,000 and I have £1,500 down on it.

The average 3 bed semi detached with a garage in our area is around the £190k markish.

krycek985

Im no expert but wouldnt it be better to use some of you deposit to pay off all your debts before applying for a mortgage ?

DanielleR

krycek985 wrote: »

Im no expert but wouldnt it be better to use some of you deposit to pay off all your debts before applying for a mortgage ?

Sadly not an option, all the money is my OH's and he wants to have as big a deposit as possible for when we start looking, he thinks if we pay that off then it could put us in a bad position for when we start looking.

I currently throw at least £500 at my debts each month then whack a couple of hundred in my savings account as a buffer (emergencies etc) and then on the next pay day I tend to put whatever is in the savings account on my debts.

DVardysShadow

DanielleR wrote: »

The thing is I'm currently disputing the default as it was for a service I had tried several times to cancel but they just wouldn't cancel it. I didn't even know it had gone to default until I logged onto Equifax (I never received a default notice, a bill or anything!)

I suggest you take this issue to the DebtFreeWannabe section of the forums. They have the expertise for this aspect. If a default is applied, they have to send you a notice first, so you may be able to overturn the default in your record.

DanielleR wrote: »

Sadly not an option, all the money is my OH's and he wants to have as big a deposit as possible for when we start looking, he thinks if we pay that off then it could put us in a bad position for when we start looking.

He is being a bit daft. Debt repayments come straight off the affordability calculation for max they will lend you. So, because credit is more expensive than a mortgage, you might find that this debt causes an even bigger reduction in the mortgage you have available. Also you are paying high interest to have money in savings which pays low interest. If it could be paid off, it should be - it will look better on the record.

DanielleR

DVardysShadow wrote: »

I suggest you take this issue to the DebtFreeWannabe section of the forums. They have the expertise for this aspect. If a default is applied, they have to send you a notice first, so you may be able to overturn the default in your record.


He is being a bit daft. Debt repayments come straight off the affordability calculation for max they will lend you. So, because credit is more expensive than a mortgage, you might find that this debt causes an even bigger reduction in the mortgage you have available. Also you are paying high interest to have money in savings which pays low interest. If it could be paid off, it should be - it will look better on the record.

Thanks for that. I'll pop a note in DFW as I think I should be able to get the default removed as well...

and trying to explain that to my OH isn't going to work. Tried it sadly Ahh well.