advice getting a mortgage after having credit card defaults and AP

dffgh

I had a residential mortgage from April 2005-November 2008, I wasn't happy where I was staying as it was too far away from family and friends so I decided to let the house out(buy to let mortgage) and move back to my mums. This was also to help me clear debts as I had work done the house by council (£5700) I ran in to serious financial problems trying to pay this bill. Due to the council being a charity organisation it could only accept a payment over a 12 month period so I had to pay out £475 x 12, I managed to pay 6 months of the bill but maxed out my credit cards( I couldn't get a loan beforehand). I said to the council that I couldn't afford £475 x 6 then they offered me to pay the remaining bill over 10 months which did help. Afterwards this left me with a massive amount of credit card debt (£17000) all I was paying was the minimum and having to use available credit on card to get by on so i was I a bad place. I enter a DMP on Aug 2010 and this ran until December 2012, I took control myself at start of the this year, credit card debt about £14000 now. I have 5 defaults with one account running normal again from November 2012 and one account on AP which I hope to clear in a few month. My last default falls off May 2017 but unsure the affects of AP as this will still show up for a couple of years after default comes off May 2017.

Please note I don't plan to move back in to my house(buy to let) and it is a long term investment.

Should I wait until 2019 after AP markers are away or will I be able to get a mainstream mortgage?

Having a buy to let mortgage with no missed/late payment should that help getting another mortgage?

Dave_Ham

A credit line will only remain for 6 years from when the default was placed.

You will find it incredibly difficult achieving a mortgage within 2 years of a default being listed and difficult achieving a mortgage/finance with a default aged between 2 to 6 years.

Deposit % and good payment indicators going forward will obviously help.

Sounds like you are young enough to have learnt a hard lesson, but you will be able to buy again in the near future.

All the best

Thrugelmir

If you have equity in the BTL. Then consider selling up and clearing your debts. This will enable you to start afresh.

dffgh

Hi Dave Ham

I don't plan to go for a mortgage until the last default falls off may 2017, me using that time to save a deposit and clear remaining debts. The problem is the effects of AP which will still show up.

Hi Thrugelmir

I'm earning about £1500 a year clear profit but if I sold I would be lucky if I made £5k on the house. It is ticking along nicely after a lot of problems at the start

Dave_Ham

They will not show up still.

izools

The accounts that were / are in an AP but never defaulted will remain on your credit file for six years from the date they're settled.

The Defaulted accounts will show on your credit file, whether or not they have an outstanding balance, for six years from the date they defaulted.

As such, come 2017, any lender will see the historic Arrangements to Pay you had set up.

It is important to note however that recent data is weighted much more so than older data. What is imperative is that once you've paid off, closed, and settled all your old bad debt, that you build history with new accounts of being much more mature and responsible.

Have one credit card, one mobile phone, and one bank account. Pay off the credit card in full each month and keep the balance below 50% of the limit at all times. Do this for a year and you should have very few issues passing the credit scoring for a mortgage.

I presume you won't be applying whilst you still owe £14,000 to credit cards? This will astronomically reduce the amount they're willing to lend so consider zeroing this before thinking about a new house purchase.