current home owner with no mortgage (through inheritance) but also in debt

krazyhorse

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Default credit score improvement...
Hi guys...

My credit score is shocking, last time I checked it was 380 something (apProx 3-4 months ago).... This is due to having £16k in debt and being with a debt charity since 2010....

My plan is to sell the flat we currently live in (which has no mortgage on it because I inherited it with mortgage paid off) for e.g. £190k.

As we live in a very compact 2bed flat, boy and girl both under 3yrs old I'm looking at 3bed house shared ownership. Reason being I'll have £190k-£16k equity (£174k equity hypothetically). So I'm looking to get around 70% of a shared ownership then rent the remaining 30% until I can get a mortgage to buy it out.

My real question to you guys is.... Once debt free... How long would I have to rent the 30% before my credit file improves and/or a bank is happy to give me mortgage?

Thanks

Dave_Ham

The shared ownership involvement makes this a harder question to answer.

Typically you could get a mortgage now, dependent upon the details with a 15% deposit.

The minute you go shared ownership, the lenders out there diminish and typically only the local BS and the mainstreamers will look at it. Mainstream will not like defaults within 6 years, although there are sometimes solutions sooner.

You will need a decent broker and copies of your Experian, Equifax and Call Credit and can do this in advance.

Good luck

krazyhorse

ok if it helps... i did use a broker approx 2 months ago and they advised me to re-apply in February 2014 as I had a default...

the broker mentioned that the default "runs out" (not sure how else to say it) after two years....

I know its like asking how long is a piece of string but once my default has "cleared" would I still be able to get a mortgage?

Because clearing my debts is dependent on selling my flat...

hope that makes sense ...

Dave_Ham

Mostly it will depend upon the detail of your case. I would push your broker to commit and confirm his/her understanding.

2 years since default is listed is a trigger for some lenders, although a default actually "drops off" 6 years after registration dates.