Getting a mortgage bad credit report

michaelaj23

Hi,
I am about to go see a mortgage broker tomorrow about getting a mortgage but I am a bit worried as I have missed a few payments on my credit cards before around 4 months ago now. These are now up to date and I am paying off more than the min amount.

How likely is this to affect my chances?

Thanks,

Michaela

Dave_Ham

Hi Michaela,

It will depend upon how good your broker is and how many consecutive payments you missed how many times.

Being a bit sloppy is easier to get around than having to much debt/not enough income to maintain payments - especially if you are close to your limits on any credit cards..

The_J

Depending on the details this is likely to curtail any application with a mainstream lender and you will need a good broker to place this.

I would post the following details and someone will be able to help:
1) How are the missed/late payments shown on your credit file? Typically it will be 1 for a missed payment, 2 for two missed payments in a row etc etc.
2) Loan To Value, what percentage deposit do you intend to put down?
3) Ideally income + mortgage amount required

michaelaj23

Hi,

Thanks. We have decided to go through a broker we know personally. He's advised us that theres a few different ways he can go around it to work something out. But we are going with Halifax due to my partners default as he advised they are more forgiving for these.

I currently have about £3,000 extra credit limit on my card, would it be better to lower the credit limit closer to the balance or keep it as it is? Im not sure what to do as I have had problems before with having too much credit when HBOS put my credit limit up to £10,000! Especially when I was only 19 at the time.

Dave_Ham

What deposit and what loan to value.

I fear the worst so far, Halifax are the most flexible of the mainstream high street lenders although typically they will not overlook a default within the last 6 years..

michaelaj23

At the moment we have 5% deposit with shared equity so works out 5%/10%.

Property is £112,995.

Two mortgage advisers so far have advised us that Halifax will take us as long as it has been settled.

Dave_Ham

I would love to be wrong, but depending upon when the default was and for how much this is likely to be hard work.

Not trying to worry you, just trying to realistically set your expectations.

In the banks eyes, you have not saved a signifcant deposit, previously defaulted (but satisfied in your favour) a previous credit agreement (?) and have credit card balance/s

You must ensure the broker puts your name first on the application - this is important..

michaelaj23

It was for a phone contract which I believe amounted in total with costs on to around £130.

Fingers crossed something will work out in our favor

Combined we earn around £34,000 + bonus.

We were told that the shared equity scheme was the best route to go down for first buyers. But then we advised we could have more for a deposit around 10% by point of move in but then we've been told that will just reduce the amount of shared equity we would be eligible for.

At the moment I am confused between the mortgage advice and the builders advice. All will be clear tomorrow though I suppose!

Thanks for your help.

Dave_Ham

Builders advice will tell you what they want to hear in order for you to try and buy a property (from them)

No neutrality there unfortunately.

Good news the default is small, goes in your favour.

If you just missed the odd payment on card 4 month + ago you may be ok. If you missed 2 + in a row with a Halifax card you have no chance as they will not take this...

Good luck

Conrad

Halifax usually decline such a case. If so your option really is to get your credit straight and paid on time for a while.

michaelaj23

Hi,

By 2+ do you mean it showing as a 2 on a credit report or just paying late 2 months in a row?

The only ones I have are 1's because I've made the payments late. I have never missed more than that and my credit rating is fair.