Poor credit rating

duggan1

This is not so much a request for where to find a mortgage, but more of a general request for advice. I have had a troubled credit history over the last number of years due to many reasons, a financially toxic relationship (which has now ended) but mostly due to my own stupidity. There have been late payments, the worst of which has been getting interest frozen on a credit card debt and agreeing a monthly sum to pay back via a debt agency. I've also recently had to resort to regular trips to payday lenders, to the extent that while my situation has not been getting any worse, it has stagnated to the point where I cannot break free of these payday loans.

All this however is coming to an end. I would say happily but as I am due to inherit money after a family member passing away that doesn't quite fit. I'll be able to pay everything off and be debt free (aside from student loans, not sure if I should pay them off lump sum or not) and the financial controls I put on myself to be able to tread water will not be wasted.

At the minute my largest outgoing is on rent, over a third of my take home pay. I want to cut this, whilst maintaining my independence in living alone, and staying in roughly the same area so I'm looking at investing the money in a home. Obviously with the chequered credit past that I have I don't expect lenders to be knocking down my door so I'm seeing if you guys have any advice.

I should be able to put down a sizeable deposit, and from a cursory glance at local property prices I would probably be looking at 50% ltv on a house at 80-90k absolute maximum. I've also considered that interest only may be best for reducing outgoings in the short term, until a lot of the black marks fall off the credit checks. There of course is also the possibility of buying something cheaper or at auction for cash and do it up but I'm considering all possibilities here.

I guess the question is:

Is it worth my while considering the mortgage route in the near future or am I likely to be disappointed? I'm not prepared to pay 'too much' extra for the risk, but I appreciate that most good mainstream deals are off the table for now.

Thanks in advance, and if this is the wrong forum I do apologise.

ACG

With a 50% deposit, you will probably be ok.
Interest only could be an issue though.

You will most likely need to speak to a broker though, unless you are prepared to spend what could potentially be a good number of hours doing the research yourself.

duggan1

ACG wrote: »

With a 50% deposit, you will probably be ok.
Interest only could be an issue though.

You will most likely need to speak to a broker though, unless you are prepared to spend what could potentially be a good number of hours doing the research yourself.

Yeah I think a broker would likely be the best course of action. As I say at this stage I'm simply researching if I am wasting my time or not.

Thanks.

Dave_Ham

You also need to get down and dirty on your credit files. Get you Experian, Equifax and Call Credit reports and understand what is listed and that when repaid, it is manifested as such on these reports.

You may well need a year free of payday loans, but your first step has been done in the stepped change in outlook.

As said, interest only is likely to be a non runner

Thrugelmir

I would suggest that you clear your debts first. Put the remainder of the money on deposit in savings accounts. Depending on the amount look at accounts such as Nationwides Save to Buy as well. In order to boost your record with potential lenders.

Time will heal your previous history. So you'll need to maintain a squeaky clean record going forward.

Don't expect immediate positive news. Be prepared to wait. Don't waste the opportunity you've been given though.

duggan1

Dave_Ham wrote: »

You also need to get down and dirty on your credit files. Get you Experian, Equifax and Call Credit reports and understand what is listed and that when repaid, it is manifested as such on these reports.

You may well need a year free of payday loans, but your first step has been done in the stepped change in outlook.

As said, interest only is likely to be a non runner

That's fine, it was a consideration to mitigate the higher interest rates I'd be paying short term.

Thrugelmir wrote: »

I would suggest that you clear your debts first. Put the remainder of the money on deposit in savings accounts. Depending on the amount look at accounts such as Nationwides Save to Buy as well. In order to boost your record with potential lenders.

Time will heal your previous history. So you'll need to maintain a squeaky clean record going forward.

Don't expect immediate positive news. Be prepared to wait. Don't waste the opportunity you've been given though.

First thing I'll be doing is paying off the debts!

I am prepared to wait of course, however if an opportunity arises I'd like to have done a lot of the legwork beforehand.