31 and a teacher, bad credit and applying for a mortgage! HELP!

lollypink

Hi all

I am 31 and earn £2700 pa as a teacher I have a deposit of £15k saved but a bad credit rating of 400 on equifax and around two stars on 'check my file' it includes a default which drops off in august this year and an old mobile phone default from 2009 ( i was unaware of) which has now been satisfied. I have only one other credit card with £500 limit from capital one which i use and pay every month in an effort to enhance my rating. I have no other debt. My question is this will I get a mortgage on my own? is it even worth applying? and if so - who to? I have been with Natwest bank for 10 years and have three accounts with them -is it worth applying to them?

I know the answer is probably wait and build credit but I was hoping to go P/T at work to persue a business oportunity in another area but I know I would never get a mortgage then!!!

I welcome any thoughts and advice

holly_hobby

Hi,

Firstly I must say that knowing you will be going PT and entering into a new business venture, would encourage me to refrain from going into any longterm high financial commitment - until at least your new source of income is established and frequent.

That being said, the older the default the less impact it can have on an application, but this is wholly dependant upon the amount of default, reason for the default and why you have chosen not to satisfy it over the last 6 yrs (but have chosen to save a 15k depsit instead). So, knowing that such q's may be asked, just think about what info you will provide to the lender if requested.

Your satisfied default (for mobile phone co), shouldn't harm your app - mobile phone providers are renowed (as per united utilities) for slapping on defaults without little encouragement. You have also settled this - showing a responsbile attitue to the liability. So this should help. (FYI - if the default is disputed you should really have the provider remove this from your CRA records. If the provider is Vodafone I can put you in touch with an on line rep who will look into the matter and correct records if the default is proven as unfair)

Your 10 yr relationship with Nat West wouldn't harm you application, if you have satisfactorily maintained your accounts - but a 15k deposit doesn't sound particuarly large, so I suspect we are looking at a high LTV, which may well be affected by your previous credit blips.

Credit score with on line CRAs are calcualted in a completely different manner than a mortgage lender will credit score. You may fair better ... or worse when the lender reviews ! (so it would be very much a "suck it an see" exercise.

However, another possible solution is to apporach the Teachers Building Society - whom operate solely for Teachers (ex Dorset where non- professionals may apply), and also individually underwrite each case (which means that you can have more influence on a decision with the underwriter). Only fly in the ointment is max LTV of 85% - so they may not suit.

Here is their direct link ... http://www.teachersbs.co.uk/home.aspx

Another lender who individually underwrites is Ipswich BS - they lend nationally for direct business, but do have geographical restrictions for intermediary business, and have just re-entered the 95% market (restricted), but also have 90% schemes.

Here is their direct link - http://www.ibs.co.uk/intro.html

Having said all of that .... my own feelings are that if you are definately to go P/T and pursue additional business ventures, that you wait until your income and position from the additional new role are both established and known to be a long term source of regular income.

Hope this helps .. and good luck which ever you decide to do ..

Holly

lollypink

thanks holly so much for your reply which is amazingly helpful!!

My phone default is with orange it was my fault but I moved swiftly after a bad realationship split and left it behind, capquest debt collectors caught up with me only a while ago and I paid up straight away but a deafukt was already on my file but now showing as satisfied.

The other default is not satisfied but drops off in august this year as it is 6 years old? equifax said they could remove it then so maybe it would be worth applying then?

Yes I agree with your advice about waiting until I am in stable position - I'm just a bit stuck about whether to apply now and try and get a mortgage before going part time sinec everyone keeps telling me 'its a good time to buy' or do I wait and chance the part time venture but in which case it may be harder to get a mortgage?.

aaahh its all so confusing!!!

holly_hobby

Well your change in job position will affect your application, if you apply before any real viability has been demonstrated in your new role - so I would suggest leaving it about 1 yr or more if possible, especially if this is a self employed position.

Your os default will "fall off" your credit record shortly after its 6th anniversary of registration. You should check that all 3 CRAs have duly removed it before you apply for any financial loan. (mortgage or otherwise).

The housing market is going to be flat for a good time yet, I would say 18 mths or more (but this is only my opinion - no one will really know, but the economy is not going to improve any time soon based on current economic influences - again my opinion only).

I would hate for your to rush and place yourself under financial pressue - but if you want to sound things out, try the leads I've given ... with good luck !

I wish you well in your new role x

Holly

victoria_stiles

Bad Credit mortgage gives you the opportunity to build up your credit if you do not have any and can not wait. For the first-time homebuyer, the process of applying for a mortgage can be daunting and even a bit scary at first.

electric-shock

what bad mortgage companies are there?

ACG

Just because the default drops of your report in 6 years does not mean your file is wiped clean - im not sure why they say it drops off after 6 years as lenders still seem to know about it to some extent.

To be honest your credit score is shot, i doubt you will get a mortgage with any mainstream lender. There are companies out there that do not credit score clients - they will look at your history and take that into account but you are on slim pickings with lenders that will even consider you (im not sure if that reads offensively or not...i dont mean it to), your best bet is to find an advisor that might be able to find something.
As i said there is the off lender out there that doesnt credit score so you might find someone prepared to offer you a mortgage.

MoneySaverLog

That will only be the case if you go back to a lender who you defaulted with. After 6 years all data has to be removed from the credit reference agencies that are used by law under the data protection act, so at that point you may be ok with another lender.

aaliasmith

Bad credit mortgage is a system which allows you to buy your dream house even if you have a bad credit record. When you apply for a new mortgage or for reverse mortgage this might be refused, even although the problems are in the past. Large number of people falling in bad credit, then the bad credit mortgage was created.

Thrugelmir

ACG wrote: »

Just because the default drops of your report in 6 years does not mean your file is wiped clean - im not sure why they say it drops off after 6 years as lenders still seem to know about it to some extent.

Will still effect the rolling "credit score" calculation. Just because its removed doesn't mean the figure is rebased.