Help - am I wasting my time saving?

troublenic

Hi

I’m new to this so please be nice and I hope this is posted in the right place, my apologies if it’s not. MSE has been a massive help to me over the last 2 years to focus on my debt and other people’s posts have helped me enormously but I’m wondering if anyone can advise me on whether to continue what I’m doing or whether I’m wasting my time dreaming of getting a mortgage as I really want my own place. If I have little chance of gaining a mortgage, renting here I come.

Quick history

I admit, I have always been bad at managing my money, during my twenties I never considered what I was doing to my credit history. In my early twenties I had 2 student accounts and was always late with payments on catalogues etc. In 2005 I moved in my now ex, I gave him 75% of my money and he managed the bills, he had always been really good at money and I had no trust issues. However he gave up a really good job and became a “property developer” and bought 10 properties over two years on buy to let mortgages (really stupid mortgages with no checks). I was the only “wage” earner and he completely fell into trouble when all our savings were spent on covering mortgage payments on untenanted houses and not able to re-mortgage at the end of fixed term deals which nearly doubled some monthly payments. I believe at least 3 of these houses have now been repossessed. (no link to me).

In 2008 I left him for other reasons and the only way I am linked with him according to Equifax is via a joint mortgage application that we never took up as the house sale fell through and a card only account that was closed 4 years ago as he owed the bank hundreds of thousands on other accounts/mortgages and as there was no credit on the account it is not featured with any credit agency. I haven’t seen him for years but I keep checking to see if he’s bankrupt yet and hope these links don’t affect me. Does anybody know if they will?

I had however taken out debts that were in my name and had been used in his words “to tide us over” and unfortunately these were now my debts. After leaving him I moved home to my parents and literately spent the following two-three years not doing very much and managed to clear over 13k of debt.

12 months ago after always never opening post for the previous 11 years I did get credit reports etc. which scared me to start with but have just got the stat £2 reports delivered again and this is what they say. I always open statements now and have everything set up with DD’s and actually am now not important enough to receive junk mail.

This is my current financial position:

Current salary - £27,000
Currently in ISA and Savings - £1800
Current bank account – HSBC advanced – but no overdraft. I’ve never applied and not sure if I’d get one.
Current monthly expenses I have to pay each month - £396.00 (car loan, insurance, parking, mobile phone bill, contact lenses)
Rent to parents – £250.

So I actually consider myself now quite lucky in the current financial climate and think I have no excuse now not to spend but to save for my future home.

Credit file results

I always believed I had defaults on my file and am shocked that I don’t actually have any. I have a high number of late payments though mostly when I left my ex but some before.

Loan – taken out in 2006. late payments showing approx. 2008 - 444444321111111111111111– cleared 15/04/2011. I’m really not sure why I was showing late payments as I was speaking to them and making agreements but that’s what it is and only have myself to blame.

Santander graduate account – overdraft – showing 1 late payment in 2008. Settled March 2011. I still have this account but with no card and no overdraft.

Capital one card – I took the great advice from this forum and took out a card in June 2010. I started with a £200 limit, that was increased to £500 and in July 12 this was increased to £1500. I have no late payments and no debt as I pay off in full for virtually every month.

Halifax[/B] – Graduate account overdraft. – I really dislike the Halifax. Completely my fault I was in debt with them but when I tried to over pay they sent me letters saying I had broken my agreement and when I finished paying them they threatened to take me to court for a balance of zero. I now know after reading this particular forum that the Halifax was probably a good bet for a mortgage, but well, as far as I’m concerned, thank god they wouldn’t consider me. Anyway after talking to them and agreeing payments at the start of 2009 they then recorded I was 3 – 4 payments behind (depends what credit agency) until it was settled in March 2011, previously always 0’s. I no longer have this account.

HSBC loan – Paid in full March 2009. Shows 7 late payments – 5 in 2007 2 in 2004.

Phone contract – never made a late payment (DD is my friend here) and had since 2005.

Catalogue – after always missing payments in my early 20s my credit files show absolutely no late payments. I’m in credit by £10 and have a credit limit of £500. Never use anymore. Every now and again I order if I see a bargain.

Car loan – started in June 2011. Never missed a payment and am on quite a high interest rate but need a car for work.

My plan

I’m looking to save £500 a month and where I live looking at rightmove I should be able to get a nice 2 bed terrace in a ftb area for approx. £65k - £80k and ideally would be looking at buying something at the £70k mark

With my current savings and my proposed savings I would be looking to save £6k over the next 12 months. This would give me a 10% deposit up to 80k but would also need to think about fees etc.

So the 64 million dollar question is do I have a chance of getting a mortgage this time next year with all the late payments? I don’t want to approach a financial adviser right now as I don’t have the deposit so if you have got this far thank you for reading and hope you can offer me some great advice.

ACG

I cant see any reason why not.

Youve got your credit report and apart from some things around 5 years ago your doing alright.
You might not get away with a 10% deposit (probably more like 15%), but yea i think your doing fine.

Once you get a bigger deposit, get updated copies or your reports just to check for any CCJs etc closer to the time and then you should hopefully be good to go. Affordability wise you will be walking it.

Thrugelmir

Keep saving for a deposit. Don't waste all the hard work that you've put in to achieve what you have. Every month your credit rating will improve a notch higher. Maybe 12 months will be a tad too early to obtain a mortgage, but that dream isn't an impossiblity.