Possible to get a mortgage?

mack83

Hi All

Through the support of this forum I managed to clear all my student debts which had been passed to DCAs and arranged full payment (or a negotiated final payment).

All Defaults are still on my credit record, and If I understand correctly, will clear at the end of 2012 and 2014 after 6 years (please confirm If this is correct).

I would like to buy a home with my fiance, but my credit record will not support even a credit card.

I can prove my income to support payment of a mortgage, and have no active debts. However, my credit record will not help matters with a list of defaults marked 'settled'.

• Will a bank accept that these debts are settled, If I provide full visibility of earnings and the bank can see how I manage my money?
• Or will every bank exclude me straight away owing to the credit check?
• Will I have to wait until 2015 (6 years from last default) to apply a mortgage?
• Can I overcompensate for bad credit by building up a larger deposit?

Thanks for your advice, It's something we would really value your input. If It's a matter of waiting about 4 years for the credit record to delete these entries then so be it.

Thrugelmir

Suggest you start by building up your deposit and maintaining an impeccable credit record. Time is the only healer.

GMS

How much do you want to borrow? How much deposit do you have?

mack83

GMS wrote: »

How much do you want to borrow? How much deposit do you have?

We aren't quite there yet. We have £10K in the bank and our wedding this year.

We could have 10% against 250K home over this year. If it was possible we would look toward buying our first home.

If its not possible, then in a few years we could save circa 17.5% against 250K or circa 15% against 300k home.

We would have a larger deposit, and a cleared credit record (I presume that defaults would completely clear leaving a clean slate) but If It's possible to get a reasonable mortgage this year I'd definitely look into it.

I'm paying £950 plus bills on a rental that could be going into our own home - seems a waste to pay another 3 years of rent paying off my landlords mortgage.

mack83

Thrugelmir wrote: »

Suggest you start by building up your deposit and maintaining an impeccable credit record. Time is the only healer.

Understand, I wish there was a way to get the credit files fixed easily!
6 years seems a long time to pay for past mistakes.

property.advert

I went through this a while back with an advisor and a scenario with bad debts at the 4 year old stage. The brief synopsis was that if the debt has been repaid, you had a large enough deposit and the income to earnings multiple was not excessive, then near prime rates could be obtained. A half decent reason why the debt occurred in the first place wouldn't harm an application - overspending would be a bad one, if you see what I mean.

Rough numbers put forward in this scenario were 70% LTV with £150k deposit on £500k property and salary of £150k per annum. No other debts.

What you can do now is not wait until year 7 before starting to repair your credit file. Getting a bank account, applying for a Vanquish type high APR credit card, perhaps a catalogue, a SIM only mobile phone contract, etc. all the easy to get stuff essentially. If you wait until year 7 then you would still have to start fro the beginning.

mack83

Okay thanks. I guess cash is king.

I was on cash-card and PAYG. I now have a Gold Account w. Natwest and a 3mobile Contract. So not completely out of the system.

Sounds like a waiting game and building up the cash deposit.