How hard is it to get a mortage these days ?

cottonhead

I know nobody can tell for sure but we are hoping to move house in the next year but have some late payments to credit cards and overdrafts. I also have 2 payday loans which will be gone soon ( never to be used again ! ) but I know they look very bad to lenders.
Have been thinking of renting for a while to get our credit situation looking better before applying but how long is it likely to take ? Once we are in the black are we talking months or years ?

beecher2

You don't mention how much of a deposit you have, what your LTV would be, and what the salary multiples are. All of this is probably quite critical.

cottonhead

A deposit of around 15% with salary of £50,000. Looking for purchase price of £200,000 - £225,000 The lender that we checked with said in theory they would lend us the amount we need. Its just whether we would actually be accepted ( not the way things look at the moment!) and how long it will take to patch things up so that we stand a good chance of acceptance I guess.

ACG

I think you might struggle if im being honest.
£180k mortgage "Should" be fine, if your credit isnt the best then i think anything above that and you might start to struggle. Thats not to say you wont get anything, it just limits what is available.

cottonhead

Thanks ACG. Right at the moment we are thinking of selling up and renting somewhere for £850 a month as apposed to paying £1200 a month mortgage and saving around £800 a month for 2 years so we have a larger deposit and an improved credit rating. Would you say thats preferable to trying to move straight away with a smaller deposit and not so good credit ? If we moved now we would have just 10% deposit. I'm guessing house prices wont rise loads in 2 years so hopefully could still get a good buy with the advantage of a better mortgage deal.

ACG

I read an article yesterday on a mortgage website. Basically interviewed 5 people in the industry at banks and Mortgage advice firms, their opinion varied from a 1% rise to a -2% decrease on protperty prices this year.

So i suspect if you wait a year or so, it wont make too much difference on the price, but you will have a bigger deposit so the deal you get on a mortgage COULD be better, presuming banks dont increase the rates they charge.