Advice on when to purchase....etc

dilemma10

Hi everybody,

I'm really in a pickle about the housing market out there.
Last summer I tried to get onto one of these 'FirstBuy' schemes on my own and although scrimped the deposit together, failed at the last hurdle because of my credit rating - it's about 480!

I am a 23 year old earning £28k and I have minimal outgoings at the moment but am a bit of a spender. However, I have decided to 'wisen' up a little after a few bad financial errors and am wondering where I go from here.

How much would banks look to lend to me in say 2/3 years time?

Will I ever get on to the property ladder with a pathetic Orange default applied about 2/3 years ago?

What sort of repayments would I be looking at if I were to get say 90% mortgage on £100k house?

How much should I save? (The more the merrier I suppose)?

What type of house & price scale? I am slightly dubious of the new builds, they seem to go into negative equity quickly.

I would be buying on my own in the Midlands (Leicestershire).

My problem is that I feel like I have surplus money £1200 each month after bills that I am not putting to good use and owning a property would give me something to focus on...at the same time all of my friends keep on harking on about plenty of time to get a mortgage when you're in your 30s!

Dave_Ham

Hi there,

Will give you some practical support and then you can the call on when it is right for you to get onto the property ladder...

If that is the only blip on your credit file, it can be sorted quickly. Forget their automated score they give you..

Have you satisfied the default? I mean paid it..?

Have you had credit since this, what type if yes?

Good call re new builds (just my opinion)

I think financially you will probably be able to buy sooner than you think, whether you do is your call and not to be taken lightly...

All the best....

dilemma10

Dave_Ham wrote: »

Hi there,

Will give you some practical support and then you can the call on when it is right for you to get onto the property ladder...

If that is the only blip on your credit file, it can be sorted quickly. Forget their automated score they give you..

Have you satisfied the default? I mean paid it..?

Have you had credit since this, what type if yes?

Good call re new builds (just my opinion)

I think financially you will probably be able to buy sooner than you think, whether you do is your call and not to be taken lightly...

All the best....

Hi Dave, this is where it gets a bit shady, I honestly am very disorganised with my finances which is a shame because financially I think I could afford my own apartment/small house.

It's my credit file, here goes:

Orange - Default from my university hey days, registered around 2008/2009 (cannot remember exactly) - it was for £178 and actually arose because of a miscommunication about extending phone contracts, would you believe that since then I have actually taken out two more phone contract and an iPad (for my job) and all paid on time. BUT default not paid, it went to some company Scotcall, that I paid off monthly but then I think they transferred it on again and now I don't know who to pay to satisfy it.

Black Horse Finance - I pay £162 monthly for a car, no missed payments and loan due to end in November this year. No problems, all gone swimmingly.

Halifax - Another dodgy one from my university hey days, I had a £400 overdraft, I then upgraded it to one of those monthly services but forgot to pay and then lots of charges got slapped on. I do not use this account and have not looked at it for about a year so not sure what is going on. I bury my head in the sand...

Next Account - £100 owing but I pay monthly and no defaults etc.

HSBC - Now here is another dodgy one - I had a £500 overdraft on this with one of those £12.50 a month service charges and the charges piled up, it is now with their in-house collections team. Woops.


But my credit report has no CCJs and only the Orange default, although I fear HSBC will now go into default. I know I seem absolutely mad but I actually think it's to do with spending money like Rothschild because I have nothing to focus on. As you can see, with my car which is my pride and joy, I have never missed a payment. My brain works backwards which no mortgage adviser would understand, (not surprisingly).

My mortgage last year for about £65k was not even approved but then I was on £23k, now I am on £28k. If they would not approve me for that, unlikely I could get on to the ladder now?

Any advice or just - pay off ALL DEBTS asap, save more and then look into it?

blueberrypie

Take your head out of the sand, pay off your debts and thus start building a better credit history. If you've £1200 surplus each month, it shouldn't be too difficult.

Then start putting the £1200 away each month, preferably in an account where you can't easily get hold of it. Pay that first, before you go spending, so you can't spend it instead.

The credit history will look better and better as time goes on, making you eligible for better mortgage deals. The savings will increase as time goes on, giving you a higher deposit and, again, making you eligible for better mortgage deals.

Head-in-sand is the worst possible thing you can do.

Dave_Ham

One step at a time, but you know what they say about genius...?

something to do with insanity being close by.

This is a crazy situation...

You said you like spending money, you need to stop saving for a month or 2 and clear these up once and for all.

On your credit report (experian and equifax) you will get some contact details, although you find when you are trying to pay someone they are easy to contact.

Get onto HSBC pronto as a current, recent default will kill you rating for longer.

Good news on the car finance, but you must change your mindset. I have been polite on this - do expect some stronger criticism from people slightly further away from 23 years old...

This will be a start - as a fixed point of measure, come back and tell us as and when you pay off and we will help rebuild your credit rating together...

dilemma10

Dave_Ham wrote: »

One step at a time, but you know what they say about genius...?

something to do with insanity being close by.

This is a crazy situation...

You said you like spending money, you need to stop saving for a month or 2 and clear these up once and for all.

On your credit report (experian and equifax) you will get some contact details, although you find when you are trying to pay someone they are easy to contact.

Get onto HSBC pronto as a current, recent default will kill you rating for longer.

Good news on the car finance, but you must change your mindset. I have been polite on this - do expect some stronger criticism from people slightly further away from 23 years old...

This will be a start - as a fixed point of measure, come back and tell us as and when you pay off and we will help rebuild your credit rating together...

Thanks Dave and I really appreciate your advice and I know that others would absolutely laugh at me. I am mad as a hatter. I will sort all of this out ASAP. It should not take me too long