Need advice - First Time Buyer, bad credit

Cthrower

Hi everyone!

I've been reading a lot on these forums about Money help, mortgages etc. but thought it would be best to register and post my own story to get more accurate information about my situation.

Currently, me and my girlfriend are looking to get a mortgage. We're both first time buyers, can easily get a 10% deposit, maybe even 15%, or 20% if it would improve our chances of being accepted.

Here's the problem;
My credit rating is bad, being the typical young male and "enjoying" myself a little too much, I have 3 defaults on my accounts from 2 years ago, all for small values (Less than £1k), which are all paid off now, but unfortunately still on my credit report!

I realised my mistakes and I'm trying to rectify my problems now by ensuring I don't miss payments, or spend more than I can afford (Credit cards etc).

On the plus side;
Between us we can easily afford the mortgage, affordability isn't an issue.
My girlfriend has no debts and a good credit rating, however, a low income so I don't think we'd get the mortgage purely based on her situation.

What are your honest opinions about our situation?
Is it worth seeing a mortgage advisor with my credit rating and pointing out the fact that we can obtain a decent deposit, and can easily afford the mortgage. Or will lenders simply send us away based on my report?

I have seen Lloyds do a "Lend a hand" mortgage and Co-op also do a Guarantor mortgage, do either of these improve our chances of being accepted if we have the support of a home-owner, with a very good credit rating and a high income?

Thanks in advance.

Dave_Ham

This will be a challenge and I would suggest you find a broker that has access to the entire market.

When you speak with someone in branch, they have 1 product and therefore will recommend that 1 product as suitable irrespective of your circumstances.

The bigger the deposit, the better the chances of success and at sensible rates.

All the best

Cthrower

Thanks for the reply.
There is a local mortgage broker in town, I think I will give them a call, or pop in to see them asap.

We were going to pop into Natwest to see what they say to us, since we have both banked with them for many years. I think I will also phone Co-op and Lloyds regarding their Guarantor/Lend a Hand mortgages.

Dave_Ham

Have a chat with your local guy first.

Typically the guarantor schemes help out where income is the issue, in opposition to credit score.

Give them a call, but remember they only have those products and will say what they need to just to get the application on the books (in most cases)

Cthrower

Thanks for the info. I had a feeling that was the case with the Guarantor.

I will call the local mortgage advisor at lunch and see what they say.

Thrugelmir

Cthrower wrote: »

I have 3 defaults on my accounts from 2 years ago, all for small values (Less than £1k),

Lenders concerns have more to do with borrowers attitude to defaulting. Rather than the amount involved. Hence why defaults are taken so seriously.

mistersmurf

Has anyone here used the co-op guarantor mortgage?

I just got accepted, have found the flat I want and think this mortgage is my only chance of getting the flat (it's a great place at a really good price, just needs a bit of work)

dancingdaisy

I am currently having the same problems.
I earn enough and I have the opportunity to buy my house for basically peanuts, infact my mortgage would be cheaper than my rent.

I have decided to go through the advisor before I approached my bank, I asked around and I had one recommended to me by a friend so he is now on the case.

I also bank with Natwest and have been told that they will tell you the mortgage will go through fine but then bad credit will blackball it, but then the bank have your application on their files and hit their monthly targets. How true this actually is I don't know, but I didn't want to take the risk.

Now I have everything crossed that he can find me a mortgage without extortionate interest rates.

I am also a first time buyer who also has good credit on her files, I always pay my CC, I have a catalogue, I have never missed a bank loan payment etc. But I fear the old CCJ and a couple of other silly bits on my file will go against me. Debt wise my debt does not even exceed 2K, I have worked hard to get out of debt and have got it down from 10K plus. I am hoping that will make a difference.

GMS

Applying to Natwest and the likes with defaults is a waste of time. Won't happen.

Guarantors will not get around the bad credit issue. Applicants need to meet criteria before guarantors come in to play.

Any cases with adverse credit need to be dealt with by a good broker with access to the lenders who will consider adverse credit.

Applying at random will harm credit score and diminish chances further.

mistersmurf

I haven't got bad credit though.

I wanted the guarantor mortgage because they'll allow me to have a slightly higher LTV % with one.

If I don't have the guarantor, I'll need to wait another few months to get the rest of the deposit together and will miss the place I've found, it's a great price and I'm capable (and willing) to do all of the work on the property myself.