Do we stand a chance with defaults and CCJ

garethw08

I am looking for a bit of advice. My wife and I are looking to buy the property we are currently renting in 18 months.

At the moment we haven't got the best credit. I have 1 default of £330 and a CCJ of £100. Both of these will be settled at the end of this month and I am looking to make a clean start to put my credit right as I have recently had a pay rise and can now get through the month comfortably with money left over at the end of the month, My wife is in a similar situation with a default on a CC of around £150. Again, this will be cleared this month.

The house is valued at £120k. We are aiming to get a 15% deposit together by the end of the 18 months if not before.

We have a current household income of £40k

Is there any chance we could get a mortgage with a 85% LTV in our situation? Or even better would we be able to get a 90% LTV in 6 months?

Any help would be highly appreciated. Thanks

kingstreet

Get all three versions of your credit file to an independent broker and he'll establish with you what will be possible and when.

garethw08

Thank you for your reply. I was told by a member of staff at my bank last week that there were only two credit agencies. Experian and Equifax (which I am signed up to). Who is the third?

ACG

The third is call credit but it can be obtained for free from noddle.co.uk.

garethw08

Ok great thank you, just checked and there is nothing else on that report only the 1 default that is on the equifax report. I know debt is debt, but are lenders more laid back when it comes to small debt?

Westminster

Laid back is not how I would describe it - particularly post-MMR.

If I were a lender and someone had a default for a small amount (so it could be argued that they didn't even bother to keep up to date on a small credit account - then how would that debtor handle a much larger debt ...)

The default date is key here - it will almost certainly need to be at least 3 years old before you can realistically look at a mortgage and you will need the services of a broker to target your application I should think.

garethw08

Sorry 'laid back' wasn't the term I should've used.

Yes I can see what you're saying. When the time comes for us to apply it will be December next year and the defaults are dated December 2012 so that would be three years. The only thing left would be the £100 CCJ which would be 2 years old by then.

Surely someone would be able to offer us something if we have a minimum of 15% deposit and a clean credit report between now and then.

Thank you for your responses I really appreciate the

Thrugelmir

garethw08 wrote: »

Surely someone would be able to offer us something if we have a minimum of 15% deposit and a clean credit report between now and then.

Depends on the lender. Setting a high bar is a straight forward way of filtering applications. While debt is debt. A CCJ is a CCJ. This tells a lender much about a potential borrower.

ACG

3 year old defaults and you can get a mortgage with a 5% deposit, 2 year old defaults and you would most likely need a 15% deposit.

But things can change in 18 months.

Butti

Lenders are currently Risk averse with a capital R!

Thrugelmir

Butti wrote: »

Lenders are currently Risk averse with a capital R!

Mortgage lending isn't priced as "risk capital". Margins are far too low.
No need to take "risks" either when demand exceeds supply.