FTB with existing payment arrangements

newbiechuck

Hi
Sorry if this has already been asked.
Situation - FTB, joint application, one applicant very good credit score, one applicant has credit report showing one default (to go July 2013) and one repayment arrangement.
Also, both applicants have current repayment arrangements with various creditors for old debts. These defaults, as above, have now mostly gone from both reports but are still there as an outgoing expense.
Question - When a mortgage is possible (post July) through a new build scheme or other, is it necessary/advisable to tell any mortgage broker/lender of the existing repayment arrangements? They are not IVA's or DMP payments as such just debts we defaulted on 6+ years ago and are managing the repayments ourselves.
Please help??

Dave_Ham

Hi there,

Impossible to tell from the current information.

What % deposit do you have?

You will need your Experian, Equifax and Call Credit files for you both and get them to a broker - not the newbuild development advisor as they will just guess.

There will potentially be solutions, although be mindful dependent upon how this information is shown on your credit files, will depend upon the solutions. An AP marker is nearly as damning as a default with many automatic credit scoring lenders.

Good luck

newbiechuck

Hi
Thanks for your reply.
We only have a small deposit at the moment so are looking at the FirstBuy/Help to Buy schemes but were told by NewHomesMortgageHelpline that no mortgages would be available on this scheme with any repayment arrangements in place. They didn't even get as far as looking at the credit reports.
Current deposit £3.5k, will increase to £5k by end of July (when final default disappears). Family/friends are able/willing to lend up to £26k if necessary.
On firstbuy scheme we are looking at deposit of £9.5k on newbuild value £190,000 and have been accepted on scheme with suggested mortgage of £143k.
When default goes in July only one repayment arrangement will show as all rest defaulted and can now only be "seen" if our outgoings are looked into.

Dave_Ham

Thanks for the additional information.

I would expect there to be markers on the account and whilst the default will disappear on the 6th year date, the agreement to pay markers will remain in place.

They do not get registered consistently mind you and therefore worth getting the files checked and any mortgage broker worth their salt will be able to tell quickly.

If they are on there, chances of any 5% deposit scheme are limited being honest.

newbiechuck

Thanks again.

That is what we thought and you have sort of answered the question....lenders only see/need to know what is on the credit report?

Action - get reports squeaky clean as quickly as possible, save as much as possible for a bigger deposit and any arrangements not showing on the report keep quiet about!

Thanks for your advice, much appreciated.

Thrugelmir

newbiechuck wrote: »

any arrangements not showing on the report keep quiet about!

Remember to answer any questions asked truthfully. Also bear in mind that lenders will cross check their internal systems for any dealings with yourselves.

shonzyd

you havent stated how much the debts are for? are you talking thousands or hundreds here? - as you state this is an ongoing expense - for how long?

newbiechuck

Thrugelmir wrote: »

Remember to answer any questions asked truthfully. Also bear in mind that lenders will cross check their internal systems for any dealings with yourselves.

When I spoke to NHMH they asked the question "Have you been bankrupt or have any IVA's?" To which I said "not IVA's as such..........." so if I had answered the question accurately I could have said "No". Instead I offered more information than was asked for.
It is all very confusing!!

newbiechuck

shonzyd wrote: »

you havent stated how much the debts are for? are you talking thousands or hundreds here? - as you state this is an ongoing expense - for how long?

It is thousands and is ongoing for quite a few years on some (15+ years!!). But the repayments are manageable and are being managed very well.
The debts are from old situations (previous partners) and will not re-occur!
We are being held back by things that happened ages ago (in some cases beyond our control), that are being paid back (as should be as they are our debts). We are not trying to shake off these debts at all we just want to stop lining someone elses pockets by renting and have our own house and stability. A mortgage is more than affordable it is just the starting point re deposit we cannot get past.

Leon_W

If they are an outgoings commitment then they have to be declared to the lender. It doesn't matter what they are for.

Putting aside what is actually on your credit report, lenders will carry out an affordability assessment which takes into account all your outgoings to come up with an affordable mortgage amount. It's pointless trying to keep them out of any application as the lender may ask for bank statements where they will be easily spotted.

Thrugelmir

As a first step. Use your saved deposit to clear your debts. You really need to get the monkey off your back in order to move forward.
As at the moment you are using the arrangement to pay as an interest free loan. Something which lenders will take a negative view of.