Advice please

sparkban

Hi Newbie here

I hope I'm posting in the correct forum and apologies if I am not.

My partner and I have been renting now for around 4 years and in honesty I'm fed up of lining someone else's pockets !

It's costing me 1k a month just on rent.

We do have some savings and want to look at buying a place ASAP.

Many people say wait wait as the market is going to crash soon but I'm not so sure.

The problem however that I have is an outstanding default from a credit card.

The debt is not settled and is just over 4 years old.
It's not for a large amount in truth just over 1k.

However I was previously advised that as the debt shows as a default there is no point paying it as either way my credit file is going to be tarnished for 6 years from the default date.

So do I pay it or not as I want to get a mortgage ASAP.

We warn combined CIRCA 85k and just want our own place and not to line someone else's pockets !


Any help or advice is appreciated.

jamesd

The prospects for the market depend on which market is. If it isn't in the south east of the country there's little prospect of a crash, except possibly for Scottish areas if the independence vote is in favour, in anticipation of higher interest rates there.

The unsettled default from four years ago will be an issue for the more selective lenders. It's a bigger issue if your deposit amount is at the lower end, less so if it's 25% rather than 5%.

If you want to potentially save costs, go for the smallest and cheapest place that meats your needs. That will leave you more money free to save for a better one later, while not paying the money to a landlord. Even better, exploit your being in a rented place now and go for a place that needs doing up and do that work before you leave the rented place.

amnblog

You mortgage options will depend largely on the size of deposit you have. A 15% deposit, no further complications! and sufficient provable income, and you should be in a good position.

Thrugelmir

sparkban wrote: »

We warn combined CIRCA 85k and just want our own place and not to line someone else's pockets !

So why hasn't the default been settled?

sparkban

4 years ago my salary was lower and I wasn't with my partner.

What's the point paying it off now if either way it's going to cause an issue with getting a mortgage I might as well save the money and just let it remove from my credit file in 2 years.

If clearing it now will still have an adverse effect there is no point paying it.

Gaz83

sparkban wrote: »

The debt is not settled and is just over 4 years old.
It's not for a large amount in truth just over 1k.

sparkban wrote: »

We warn combined CIRCA 85k and just want our own place and not to line someone else's pockets !

sparkban wrote: »

Any help or advice is appreciated.

Pay your debt.

Thrugelmir

sparkban wrote: »

What's the point paying it off now if either way it's going to cause an issue with getting a mortgage I might as well save the money and just let it remove from my credit file in 2 years.

Precisely the reason that lenders dislike defaults. As indicates the character of the borrower and their attitude to money. Which is all part of the application process. Modern technology detects traits fairly accurately.

Senior_Paper_Monitor

There are certainly reasonably competitive lenders that will accept a fairly small default of that age (even unsatisfied).


As other's have alluded, the demonstrated "What's the point paying it off now if either way it's going to cause an issue with getting a mortgage I might as well save the money and just let it remove from my credit file in 2 years" attitude, despite "an increased salary" is likely to tweek an underwriter's interests (particularly at the cheaper end). If you take this attitude to a debt with someone else - what attitude will you take to theirs if you have the opportunity to evade.

Mortgage_Mark_2

Whilst there are lenders out there who will lend based on 'just' a four-year old, unsatisfied default, I'm staggered that you've come onto this forum to ask for advice in obtaining a mortgage, and are openly saying you don't see the point in repaying a debt that you owe.

Surely you can see the flaw in this plan? And even if your income has gone up dramatically in the last year or two; a combined income of c.£85k would mean a big enough net income to clear outstanding debts - particularly those which you've not stuck to repayment terms on. And if you can't afford to repay that debt then frankly you should forget the idea of home ownership as that's unlikely to be affordable either.

getmore4less

sparkban wrote: »

I might as well save the money and just let it remove from my credit file in 2 years.

There are ways they can get a default back on your record.


The debt will still show and it will probably be obvious there was a default.


Another option is they move the debt to a debt collection agency then that will show for another 6 years(clearly a previous default)........

Senior_Paper_Monitor

Technically if the defaulted debt is transferred it should be on the original date rather than start again - BUT it certainly doesn't always work that way and can be a buggah to shift if it is incorrectly handled (often the case).


None of this changes the moral position (for those who wish to consider it) - or the possible interpretation of the underwriter.