Payday Loans - Credit Ratings and Mortgages

smerch1468

I took out a series of payday loans in 2011, when I was going through a difficult financial period which culminated in redundancy.

Ironically, the redundancy gave me enough of a pay off to sort myself out, clearing credit card debts and settle what was a series of 6 payday loans with wonga.

I have checked all of my credit files this year and both show "excellent" ratings, the only blip is missed credit card payments from 2010, early 2011. I missed 2 or 3 payments by less than 1 month.

I have a deposit of approximately £50,000 that I would like to use on a buy to let property, valued at £180,000. The rental income will more than cover the mortgage repayments.

What realistically can I expect from the lenders. Am I likely to be considered "near prime" or will I have access to the best deals on the market?

I am currently in the process of setting up my own business, which has anticipated first year earnings of £25k.

amnblog

You can expect a lot of 'no's' if you approach the wrong lenders.

If you are still employed you might have some options. Go self-employed now and you are playing a waiting game.

Engage a mortgage broker.

smerch1468

amnblog wrote: »

You can expect a lot of 'no's' if you approach the wrong lenders.

If you are still employed you might have some options. Go self-employed now and you are playing a waiting game.

Engage a mortgage broker.

Thanks for your response.

I am a director of a Limited company which will start trading at the end of June. It is a medical insurance franchise with WPA and I will be granted FCA authorisation at the end of June pending succesful completion of their T&C program.

So from what you are saying, I will need to wait and show a track record of stable income from the franchise for a few years before I can realistically expect to get any sort of mortgage (BTL or residential)?

At this time the payday loans/missed credit card payments will still be on my file, but can I realistically expect a more favourable outcome at this stage or do I need to be totally clean of any credit blemishes for 6 years?

amnblog

One year trading minimum - you will need to use a mortgage broker.

smerch1468

amnblog wrote: »

One year trading minimum - you will need to use a mortgage broker.

I will be networking at BNI and will no doubt come across a mortgage broker.

Thanks for your comments.

GMS

Do you own a residential property? Do you have any other properties?

smerch1468

GMS wrote: »

Do you own a residential property? Do you have any other properties?

I sold my ex marital home in February to provide funds to start up the business, and have £40-£50k of surplus capital to invest in a BTL.

I currently live in a property which I jointly own with my mum and my sister, with no mortgage, and is worth over £550k.