Extra advice please

j3nks05

We have just sold our home and due to debts and poor credit score will be renting as soon as the house is completed
We have equity in our home with which we are putting the deposit for our next house purchase to one side and using the rest to pay outstanding debts
There is one default on my credit file, this account will be paid off with the money from the sale
We've spoken with a mortgage broker who's advised us to go back to her 6 months after making the final payments to our debts to then look into applying for a mortgage for the next house purchase
In that time we will also have been saving extra money towards the deposit and so when the time comes to apply we will have 15-20% deposit but at very worst 10% (this 10% probably won't happen but I'm factoring it in just incase of some unforseeable very expensive future drama !)
So what I really would like your opinion on is, do you think 6 months after paying debts is a good timescale to then apply for a mortgage and would a 15-20% deposit be good enough or do we need to stop feeding ourselves and the kids and save more ( I wouldn't actually stop feeding the kids
Thanks in advance and if I've missed any important info I'm sorry !

Dave_Ham

I would strongly consider whether you need to go into rented now, especially with children only to then try and buy in 6 months.

Please detail exactly what bad credit you have, specifically details on the default/s with their date and value.

Furthermore any mortgage arrears you have had in the last 3 years would be useful.

If you can safeguard 15% of a future purchase value from your home sale, you may be able to buy now as part of the chain and avoid the rental game.

kingstreet

Six months after repaying a default is not significant to any lender I can think of.

Six years after registration, a default falls off your credit file. Some lenders ignore a default once it's three or four years old. So what date was the default registered?

Some lenders will ignore a small default under £250, others £500, again depending on the amount of the default. So how much was it?

The lower the loan to value, the sooner you'll have options. A bigger loan to value (smaller deposit) means you'll have to wait longer.

I don't think anyone can steer you with any degree of accuracy here without more information from you.

j3nks05

Thanks for your replies
No mortgage arrears we always paid on time and never missed a payment for the 15 years we've been here,
Credit card with £3500 balance and is the one with the default early 2010 not sure of the exact month
3 other credit cards which will all be paid on completion
Credit score is an awful 600

kingstreet

If you have not already done so, get all three versions of your credit file and see if the default appears on all of them.

Stop paying for the CRA "credit score" if you are, it's a waste of time and money. Lenders do not use there numbers and plenty of "600" scores have got a mortgage and plenty of "999" scores have been declined because, for example, they have no job!

Dave_Ham

Slow down your house sale and get some sensible, formal advice.

If you can buy somewhere that allows a 15% deposit (from equity) subject to income and the specifics, this potentially can be achievable now.

As stated, all 3 versions of the file will be vital

j3nks05

thanks for your advice everyone, ill check the other versions and see where we are from them