Awful credit rating - any chance of a mortgage?

Feel_Sick

Hi,
Just musing really at this point.

I have a bad credit history.

I do however have a potential 85% deposit in my favour.

I earn 21k plus commission plus sector, this normally bumps my salary up around £300 a month. I know some lenders have not taken the sector pay and commission into account on some of my friends applications.

Any chance?

Dave_Ham

Any details you can provide on the bad credit will be useful, however most can be mitigated by your 85% deposit I would imagine.

If CCJ's or defaults please give date and if settled...?

There will be a solution due to deposit, although obviously its finding a solution without the stupid rates that are sometimes attached with it...

Feel_Sick

I have rather buried my head in the sand as to my debts - i know, i know.

I dont have a ccj, its mainly defaults when i was made jobless for a while.
Its a loan, with a company i now know are awful..
And a credit card with Lloyds tsb.

I estimate my debt to be around 10k, maybe less. Scary biscuits.
Oh and not paid off.
Im only musing at this point - i could just buy un mortgaged but the properties ive seen are out of my price bracket by approx 50k.

I dont know its better to sort the debt or not before i apply as ive been told it takes a while to come off file anyway.

Dave_Ham

From a credit scoring perspective if you want a mortgage, you have to repay the defaults (6 years from issue on file) as otherwise you are unmortgageable.

This is also not me saying pay the debts and you will get a mortgage, as this is not the case.

If you are looking for a mortgage now, clearing old defaults may not necessarily bring you the result you are looking for...

Given the 85% deposit and being £50k short, you must be looking at expensive properties; is there no way you could reduce this and buy outright?

Feel_Sick

The property i need has to have certain things.
I can afford this type of property in other parts of the country but typically not in the area of my job which, is not transferrable.

I would love to be mortgage free but it just doesnt stretch enough, and as im looking for a forever home this is important.

Dave_Ham

I understand entirely, although you will need to settle the outstanding defaults first...

Then work on a credit rebuild strategy and then look to buy...

Don't really see a shortcut unless you get somebody else involved with a cleaner credit report..

Feel_Sick

Ok thankyou.
Roughly how long, if i pay the debt back, will it be before it shows on my file?

Dave_Ham

Typically shows within a month, although you will need to evidence improved credit control..

Things like sub prime credit cards will help rebuild this...