Mortgage when debt free

R997

A couple of years back my wife's business got into trouble and we've been left carrying quite a lot of debts (around £28k at the moment). We're paying this off at an average of £900pcm over the next couple of years, and now we're both in safe, stable jobs that pay well, things are not looking too bad. We avoided bankruptcy, which did seem like a very real possibility at one point, but my wife missed several months of card and loan repayments, and ended up in the HSBC collections system.

While all this was happening we sold our house and moved into a rented property. Once we've cleared the debt (and put together a deposit) the very next thing we do will be to buy a house.

My question is this..... my credit rating is not too bad. I've been late on some card payments and things, but no CCJ or bankruptcy. My wife is in a worse position, but again did avoid bankruptcy and is now paying debts back on-time and consistently. How much impact is this likely to have on our ability to get a mortgage in, say, four years time? Is there anything we can do to reduce the impact, other than paying back our debts on-time and in full?

Caladan

You don't say if the debts are with collection agents or are being repaid as per the original terms (i.e are you in some form of agreement or not?). If you have negotiated repayment arrangements you'll want to pay these debts in full and then wait a while (or expect to pay well over the odds).

If you're repaying the debts as per the original terms and just have a few late payments on file then a few years after those payments were missed I can't imagine you'll have a problem (still pay off the debts as a priority though).

Please note I'm no expert on these matters.