How long to wait to apply for mortgage after clearing £40k debt?

howstupid

We are currently renting and due to various circumstances I will be able to clear £40k on a myriad of loans and credit cards and still have a £50k deposit in the next week.

Husband and I earn £90k between us plus £10 to £15k bonus.

I plan to close all but 2 of my credit cards accounts and reduce the limits on those.

No missed payments ever.

I know I need to wait until the balances are all zero on my credit report but how long after that would it be safe to apply for a mortgage (85% LTV 3 times joint income before bonus)

lonestar1

assuming they want to see 3 months of bank statements at least that long so your repayments dont get queried

Argghhh

did u win the lottery?

howstupid

Not quite but an unexpected windfall.

Does anyone know how detrimental the repayments on older bank statements might be and how far back on my credit history a lender might look?

My available credit would be minimal.

kinger101

Perhaps a mortgage broker might be a good option in this instance. The no payments missed sounds good, but accruing £40k on a high salary gives the appearance of someone not used to living within their means.

howstupid

I agree kinger, but lesson learned, it was worse than that previously so has been decreasing and I just needed to get rid of it.

Does anyone know how far back lenders will look if there is no current debt?

Thrugelmir

Lenders have access to the previous 72 months of data.

Is the money in anyway gifted?

Certainly tidying up your credit accounts is a major step forwards.

howstupid

No, it's not gifted- the majority is from an investment that finally came good.

I can't change the past but I'm hoping rectifying the situation will stand me in good sted- am I being unrealistic?

nobodysdriving

I had a good track record in the sense that I never missed a payment.

However I had £35k worth of debts when I actually applied for the mortgage (I earn £47k basic guaranteed and £19k REGULAR overtime proven to be so over past 5 years with payslips)

anyway, I cleared the debts at same time as applying, I got the mortgage.

howstupid

That good to know nobody.

Would you mind telling me how long ago that was and who the lender was- feel free to PM if you'd rather.

It would be good to know which lenders to try first in order to avoid messing up my credit score (further) with multiple applications.

Was your debt repaid with equity from your sale or did you keep the debt?

Thrugelmir

howstupid wrote: »

I can't change the past but I'm hoping rectifying the situation will stand me in good sted- am I being unrealistic?

Unrealistic to expect an overnight change. As lenders will wish to that the improvement isn't temporary. As your indebtedness happened for a reason. Will also take a little while for your credit file to reflect the fact that the accounts are now clear.