Preparing for a mortgage in the next few years

HBPencil

Hello all - just a bit of advice needed please.

I am starting to prepare for the fact that will need to apply for a mortgage in the next few years and am trying to make sure my financial history will allow me.

Bit of background - no CCJ or bankruptcies but i was a silly student (6-9 years ago) and wasn't very smart with my money or credit. All paid back except one last debt of just over £1k

I have checked my Noddle report and i am 1 out of 5, my current credit card is up to date along with bank accounts and phone etc, however this one remaining debt shows as default.

I am planning on contacting the store card i owe the debt and arranging a repayment scheme.

With all this in place will i be a desirable candidate for a mortgage? I will have a deposit of £30-35k. What kind of house prices will be in my mortgage range?

Is there anything else i can do to demonstrate that my financial messiness is in my past and that i am now organised and responsible?

Thanks

Foxy-Stoat_3

Only good credit history with no missed payments. If you dont use a credit card for buying food and fuel then use one and clear it every month.

Worse case, depending on your income, you go to the lender/broker with a 25% cash deposit. So look for property around £140,000 if you earn £35,000 a year or more.

Wozza85

Best bet is to clear that default debt, wait about a year then apply!

If you have so much for a deposit cant you just pay off the debt with some of it now?

ACG

Dont arrange a payment plan!

Either pay it back or dont but a payment plan will cause more harm than good and surprisingly more than if you did not pay it back at all.

Credit history over 6 years old should not be on your credit report so dont worry about it.

I generally say to people they can borrow around 4-5x income plus deposit on top.

HBPencil

My deposit is coming from the sale of my grandmothers house (Left in her will to split between 5 of us) so i don't currently have access to any of it and why i am getting ready to prepare for a mortgage.

I am surprised to hear a payment plan is worse than not paying back a debt, i thought i was being reposnsible by admitting the debt and paying back what i can.

Ultimately the advice seems to be clear up financial mess wait a year and then go for it?

Wozza85

HBPencil wrote: »

My deposit is coming from the sale of my grandmothers house (Left in her will to split between 5 of us) so i don't currently have access to any of it and why i am getting ready to prepare for a mortgage.

I am surprised to hear a payment plan is worse than not paying back a debt, i thought i was being reposnsible by admitting the debt and paying back what i can.

Ultimately the advice seems to be clear up financial mess wait a year and then go for it?

Well the longer you can leave it after settling debt the better but depends on how long you can leave it and when you want a house. You may have to contact a decent broker nearer the time but I'd say if you can, clear debts then look. With a decent deposit you will have a better chance. Market may change for the better or worse by the time you're ready to apply so there is no telling right now...But try and settle the debt then go from there.

Foxy-Stoat_3

You don't need to admit you have the debt, as the debt is already yours. Paying back what you can just confirms that you cant afford to pay it back in full anyway.

As others said, sort out all your defaults and maintain a good credit history for 12 months + then apply when you have the deposit.