Questions about the best chance to get a mortgage/improve my credit score

Scottyed

I'm looking to get a property early this year after clearing shedloads of Debts (excellently maintained Debts).

Age: 28
Living with Parents
Wages: £38,500 (£2378 a month after tax)
Bonuses: £1,500 to £1900 (Company performance related and not guaranteed)

Current Debts/Savings:

Savings: £12,000

Debts/Credit Facilities:

Loan (£4400 roughly outstanding @475 a month)
Credit Card: £610 (£4500 Limit)
Current Account £4000 overdraft facility (Never used, always in the black)
Orange Mobile phone - simple contract
Current account - No facilities, but still listed on my report (used for paying bills)

Credit Check/Score from Equifax:

Did this last night and my score was 484 (Which shows up as excellent?)

Credit Agreements Section (Cut from web site):

Good: You have 5 active accounts and 7 settled accounts on file at your current address. Credit grantors prefer that you have at least one or two accounts as part of your credit profile. Active accounts are preferred to settled accounts.

Excellent: Your oldest account is 8 or more years old. Credit grantors prefer to see accounts opened at least 3 years.

Fair: Your payment history shows that you have previously been 1 month in arrears. While you haven't been significantly overdue in making payments, some credit grantors may not grant you credit if you have other risk signals present on your credit report. (Missed one payment by accident in May last year)

Excellent: All payments on your accounts are up to date.

Excellent: Credit reference agencies are receiving periodic updates from your credit grantor(s) that reflect you have made payments on time in the past.

Excellent: You have no defaults.

Electoral Roll: Good (been there for 6 years)

Searches: Excellent (0 Searches)

Court Information: Excellent (Nothing)



Plans:

I would like to buy a property as soon as possible (i.e. within the next 4 months as living with parents is driving me insane and my current relationship is being badly strained due to not having our own privacy, she live with parents also and we have been together 5 years, and who you spend your life with is the most important thing). I would like to be sensible and buy a place around £125,000 (with a £12.5K deposit)

I have a 2003 Audi A6 1.9Tdi with 118K on the clock, which I have spent a fortune on over the last 2 years and need to spend probably £250 to get it sellable (central locking stopped working). I don't want to have an unreliable car when I get a property, as everything wrong with this audi seems to cost £500.

I will have around £1500 at the end of the month, I would like to sink it into the car loan and pay off my visa. I would like then to pay off my existing loan by selling my car. That is then me square with debts.

I would then like to take a new loan out for £10K and buy an almost new Volkswagen Golf Diesel (which will also save me around £800 per year, on fuel, tyres, insurance etc). So I have a nice reliable car which I am paying back at £250 a month over 4 years. I am making the assumption that I will always be paying a monthly figure for a car for the rest of my working life)

So paying back £660 on a mortgage and £250 on a car on a £2378 take home pay without other debts should be affordable. I am also in negotiations to get a pay rise within the next 4-6 weeks (minimum £3000).


My questions:

- My 5 active accounts, if I closed off my orange mobile (have company phone) and stopped my overdraft facility would that get me up to Excellent? Or is it the 7 settled accounts that are taking my score down? If I ask for my credit card limits to be reduced will that help?

- If I applied for a mortgage with my current loan still active (paying £475 a month) is this likely to hurt my chances?

- If I settle my loan and take a new one out for the new car before applying for the mortgage, will this hurt my credit score? i.e. settling another account, access to new credit

- Do mortgages work exactly in the same way as other Cards, Loans etc? Surely it must be about risk opposed to profit? If a fixed rate and you are good with payments then surely profit is guaranteed?

- I'm under the assumption that either I need to do the settlement/new loan either before or after the mortgage has went through as during the application is very bad?

- Once a mortgage has been approved, would it still be a bad idea to do the settlement/new loan before the mortgage is active (i.e. When I move in?)

- Is my credit card likely for me to get a mortgage easily or are there likely to be hoops?

- Anything I am missing about my situation?

Sorry about the length, and thank you for your time.

Scott

kingstreet

Stop worrying about the daft numbers you get from credit reference agencies. They are indicative at best. There are plenty of past threads where 999 scores from the other lot still resulted in a decline.

As long as you maintain your credit commitments properly and have a decent employment and residence record (best is three years or more at each) you should be a good proposition for any lender.

As you appear to be looking for a 90% mortgage, there may be one or two lenders who have "form" for cherry-picking and declining good quality applicants. This is because they have only limited funds available and turn down more applicants than they accept.

Don't worry about paying off credit before you apply for a mortgage. As long as you tick the box to say you'll pay it off on, or before, completion the monthly payment won't be deducted from your income to calculate how much you can borrow...

If you plan to apply for credit again, do it well before the mortgage application or leave it until after completion.