First Time Buyer

ADPADP

Hi Guys,

Currently have a 10% (£15,500) deposit for a property of £155,000. One of us has a payment plan / arrangement to pay on credit history (within last 2 years - now settled) although no payments missed, other credit history is fine. Deposit has been saved over last 18 months (Both have income of 24-26k). One of us is on a fixed term 12 month contract (not expecting trouble finding work after this and have been in employment for 12 months post uni bar a month between contracts that was opted for and the other has been in work about 11-12 months and on a permanent contract.

What's our next step with regards to a mortgage, we haven't applied for any yet - are we likely to be accepted?

Thanks

Dave_Ham

I would suggest you hunt down a broker and put everything on the table. Would be advisable to get your Experian, Equifax and Call Credit files in advance.

10% is pretty much the minimum amount for a mainstream mortgage and with both a contract worker and recent Debt Management Plan this will not be straightforward.

You need to see how the DMP was administrated and see if defaults were applied on the credit files. If they were it is highly likely to be a dealbreaker at 90% loan to value.

Good luck

ADPADP

Hi Dave Ham,

Thanks for your reply, much appreciated. I am pretty sure no defaults were applied as no payments were missed it was an overdraft that was recalled but that my partner could not pay off outright and agreed to this arrangement to pay unaware that it may imapact her credit rating later in life.

How big an issue do you think this is?

Thanks again.

Dave_Ham

It depends upon how they are recorded on the credit files. Often when a debt is repaid monthly they mark with a default.

If it is marked as a default it will be a huge issue, if not and AP or missed payments then it will be an issue which may/may not be a showstopper.

Many lenders will not like the contract status on employment either, hence my broker requirement suggestion..

All the best

ADPADP

Hi again Guys,

DaveHam thanks for the further reply. I have attached a screenshot of what equifax shows is this clearer?

Also I have just had my contracted extended a few years, hopefully this is much better to a lender?

Thanks again all.

ADPADP

Any ideas guys?:beer:

Thrugelmir

ADPADP wrote: »

I am pretty sure no defaults were applied as no payments were missed it was an overdraft that was recalled but that my partner could not pay off outright and agreed to this arrangement to pay unaware that it may imapact her credit rating later in life.

How big an issue do you think this is?

Thanks again.

Whatever your partner thought at the time has no relevance now.

Entering into an arrangement will have been registered with one of the main credit agencies. So will come to light when an application for a mortgage is made.

Keep saving to increase the deposit. Remember also that time heals. So maintain a squeaky clean record from now on.

ADPADP

Thanks for the reply. I have attached a screenshot of how it is recorded a few posts up. Really not keen on further saving as that means spending extra money on rent that we could be paying on a mortgage.

droiderm

From my non expert opinion, looks like no default is registered on that account on that credit reference file. Have you checked the others as Dave suggested?

Also to reiterate what Dave said "if not and AP or missed payments then it will be an issue which may/may not be a showstopper". Looks like you might have some hope based on what you have posted?

Thrugelmir

ADPADP wrote: »

Thanks for the reply. I have attached a screenshot of how it is recorded a few posts up. Really not keen on further saving as that means spending extra money on rent that we could be paying on a mortgage.

There's also Callcredit and Experian. Lenders register their data with one of the main agencies. So to obtain a full picture you'd need to review all of them.

I empathise with what you are saying. Amazing what you can achieve if you really put your mind to it though. Much depends on how much you want something.

kingstreet

You need to get hold of the other two statutory credit files as you can't be sure what's recorded on each or that you can guarantee going to the right lender which uses the right CRA;-

Experian

https://secure.wiseconsumer.uk.exper...x.html?data=00

CallCredit

https://www.callcredit.co.uk/stat-re...pl=regPurchase

Take them along to a meeting with a good independent or whole market mortgage broker. Ask friends and relatives for a recommendation. Failing that, use https://www.unbiased.co.uk remembering to switch off "sponsored ads only" option so you get a full list, not just the paid-for adverts.

The £2 statutory paper files will be fine. Avoid online schemes you have to pay for which give you your inside-leg measurement and call it a "credit score" as this is different to the lender's, the one which actually matters to you...