Mortgage For Bad Credit/Defaults

MrsHughes88

Hi

My husband and I are looking at getting a mortgage we currently pay £595 renting our current property and would love to put this money towards owning our own home instead of the money just disappearing!

We both have defualts from a joint account with Halifax from a couple of years ago. We currently have a debt repayment plan with PayPlan which we plan to consolodate before we take this mortgage out.

If we pay PayPlan off then we will have £16k deposit. We are looking at a mortgage for around £140k. My husbands wage is £30k a year and mine is £7k a year.

Can anyone advise us whether it's worth looking into whilst the defualts are still on our accounts. Think it will be another 3/4 years before it's cleared as Halifax waited almost 3 years before putting the default on our account!!

Many Thanks

Kelly x

ACG

How much is the default for?

At 90% LTV (give or take) i dont think you stand much of a chance.
I would say your best getting that debt cleared asap and saving up to get to a 15 or 20% deposit.

There will then be potentially a few lenders albeit not at a fantastic rate.

Thrugelmir

Clear your debts as soon as possible. That way your credit profile will be repaired earlier.

MrsHughes88

I think the default is for around £500.

We are looking to clear our debts in the next week or so but also wanting to get started on a mortgage ASAP instead of putting almost £600 a month into nothing x

DomRavioli

even at 3x your joint incomes (due to defaults) you wont get 140k for a mortgage, you don't earn enough and you are too risky.

MrsHughes88

Thank you all for your input. What we be a realistic amount to look at? I was looking for houses around £100k but hubby is more of a pain to please! Silly man! X

sleepless_saver

MrsHughes88 wrote: »

I think the default is for around £500.

We are looking to clear our debts in the next week or so but also wanting to get started on a mortgage ASAP instead of putting almost £600 a month into nothing x

If your total debt is only £500 why are you planning to consolidate it? Where does the £16k deposit come from?

MrsHughes88

£500 isn't the total debt. £500 is the debt we have the default on. The total debt left to pay is £4500.

The £16k is an inheritance x

maninthestreet

Use 4.5K of the 16K inheritance to get yourself out of debt. At the moment, you will appear to any potential lender as being unable to handle even a few thousands pounds of debt, so how would you cope with over £100K+ of debt?

Dave_Ham

Rule of thumb I would work to if I was you is to do whatever you need to do to get to a 20% deposit.

Whether this is to actually save, or to lower purchase price expectations your call.

This will come in line with point 2, which is you need at least 18 months - 2 years from your last default and ideally 1 year from the debt management plan.

Lenders may look at you from this point, although you are highly likely to need a decent broker.

sammyjammy

MrsHughes88 wrote: »

I think the default is for around £500.

We are looking to clear our debts in the next week or so but also wanting to get started on a mortgage ASAP instead of putting almost £600 a month into nothing x

Your not putting £600 into nothing it's a roof over your head!