What lenders want... confused

Kt8

Hi guys... partner and I are first time buyers looking to get a mortgage next year.

We are going to see a broker in january/february but i wanted to check here 1st as I am confused at what lenders really want?

Some people are saying lenders prefer it if you have lots of credit, pay only the minimum, have car finances etc etc.

But then when I read up on things I am told it is best to not have too much credit/debt, to pay credit off in full each month ?

I am worrying as I have some red late payments on my credit report from may 2007. These will drop off next May i am told? These were from orange mobile phone contract and a store card (£100 limit). I was in the middle of my finals at Uni at the time and was pretty niave. These are all settled around 4-5 years ago.

Since then i have had zero missed payments, have paid a loan off from Halifax (that i was given at the time in 2008 of £7000), cleared my overdraft from Halifax last year (£500) as I didnt want an overdraft.

I have one credit card to build my credit; a capital one building credit (£200 limit) which I pay off in full every month and never max out.

I have a littlewoods online account (clothing) £1500 limit I got about 1 year or so ago and pay this off in full each month.

My credit report still has warning in red for credit agreements I am assuming is from the late payments in 2007.

I earn £26,500, partner earns £30,000, both in NHS with increasing increments yearly. We dont own anything on finance/higher purchase. We have a £30,000 deposit for a house of £200,000.

He has a credit card, no late payments.

would I be denied the mortgage because of these late payments and because I dont have big credit card debts? I dont want credit card debts! Should I get rid of the littlewoods account?

We are 1st time buyers living in a family property with little outgoings

Any help would be extremely appreciated. x

ACG

2007 is a while back, seems like you do have had other credit which you have kept on top of.

Some fussy lenders may not accept you, but in the main you should be fine. I wouldnt worry too much ive seen people in much worse positions get mortgages.

Kt8

thanks ACG...I am really stressing over it sadly.

I am 26 and partner is 30. No dependants..just the cats

ACG

Youll be fine going off what you have said.

I know its easier said than done but it seems alright to me.

Kt8

would you say its best to keep the credit card and littlewoods to show I have credit and routinely pay it off in full each month or get rid of them before we apply?

ACG

If the balances are small each month it wont matter too much. I would say keep the balances as low as possible, if you intend to use them keep them. If not then get rid.

R_P_W

Who has told you that mortgage lenders prefer you to have big credit card debts and car finance??????

Goldiegirl

I would say that lenders like to see a history of credit commitments being paid on time with no arrears.

In my mind excessive credit card balances could indicate that a person is living beyond their means, and could cause a lender to ask questions

Kt8

R_P_W wrote: »

Who has told you that mortgage lenders prefer you to have big credit card debts and car finance??????

person in work think trying to scare me ....:o

my credit card limit is £200 (building credit opened it in 2010) and is never maxed out. Pay it off in full each month.

Think i am worrying as on my report my 'financial agreements' are still in RED 'warning'. Even tho it was all from 2007.
No missed payments on anything ever since.

Thrugelmir

Goldiegirl wrote: »

I would say that lenders like to see a history of credit commitments being paid on time with no arrears.

Lenders prefer a savings history. Preferably with themselves.

Kt8

we both save with halifax..and have current accounts with halifax...

thanks