Trying to fix bad credit because I'm DESPERATE for a mortgage

HomeSaver

Hello everyone...

I've read a lot of posts on here over the years... and learnt a lot... but this is the point I need more input than I can find through searches.

I am looking for a mortgage for my first home.

I have a "very poor" credit rating of 376.

I have one CCJ showing on my credit file

All debts showing on Experian are now settled.

I've just applied for a Credit Building Credit Card to improve my score.

My bad credit stems from a significant period of illness where I had no income and was unable to manage my money myself. This was several years ago. I am now in full time employment and have never missed a rent payment so I know I have the ability to make my mortgage repayments.

I have worked very hard to try and fix my credit rating over recent months. And I am also in the fortunate position of coming into some money now which will provide a large deposit for house by any ones terms.

My problem is that I know my credit rating is bad... and I desperately need to move for my own health and wellbeing. I am realistic about my affordability and am doing everything I can to accumulate even more funds... Tesco Value range anyone??? But I cant seem to find out much about how I can work around bad credit to find a mortgage?

Is there such a thing as a bad credit mortgage lender?

Can I get a guarantor for a mortgage and will this make me easier to lend to?

Other than the responsible use of a credit building card what more can I do to help me get a mortgage.

I don't have long before I am going to need to buy this house...

Can any one help me with some advice???

Thanks for reading

ACG

What is on your credit report?
Is it just one CCJ or are there defaults and missed payments? When are they dated?
When did you get back on top and catch up with you repoayments?

How much are you hoping to purchase for?
How much is your deposit?
How much is your income?

HomeSaver

ACG wrote: »

What is on your credit report?
Is it just one CCJ or are there defaults and missed payments? When are they dated?
When did you get back on top and catch up with you repoayments?

How much are you hoping to purchase for?
How much is your deposit?
How much is your income?

Hi thanks for your quick reply.


There are defaults and missed payments on there as well as the one CCJ. All of those debts are now settled though: most were settled six months ago, the two remaining were settled one month ago. One from a student overdraft is being repayed in instalments.


I am not sure of purchase price yet as it depends on the final lump sum I receive, and what lenders may offer me... But the deposit will be sizeable... about 30k plus... (houses I have been looking at are about £125k. I envisage being able to afford repayments of £500-£750 pcm based on my current outgoings/rent.


I earn 14k basic and commission on top... Last year this came out about 20k.


Does that help at all?

ACG

When is the most recent CCJ or Default dated?

I think your figures are going to be out. Lenders will typically take around 50% of your commission. So if you assume £14k plus £3k - thats £17k.

Multiply that by around 4 - 4.5 and your looking at around £68-77k + your deposit. At best thats around £107k as a purchase price.

HomeSaver

ACG wrote: »

When is the most recent CCJ or Default dated?

I think your figures are going to be out. Lenders will typically take around 50% of your commission. So if you assume £14k plus £3k - thats £17k.

Multiply that by around 4 - 4.5 and your looking at around £68-77k + your deposit. At best thats around £107k as a purchase price.

Most recent was a default on 11th Jan 2015 (it was paid before this but Experian hasn't caught up)

The play in the upper end of the purchase price will come from being able to increase the deposit. I understand there will be a maximum amount loaned via mortgage within that region £60k-£70k region.

Are you able to give me some hints as to how I can pursue it going forward? Do guarantors etc help? Or is that not an option with mortgages?


Thank you so much for your help

DpchMd

HomeSaver wrote: »

Most recent was a default on 11th Jan 2015 (it was paid before this but Experian hasn't caught up)

The play in the upper end of the purchase price will come from being able to increase the deposit. I understand there will be a maximum amount loaned via mortgage within that region £60k-£70k region.

Are you able to give me some hints as to how I can pursue it going forward? Do guarantors etc help? Or is that not an option with mortgages?


Thank you so much for your help

You may need to wait a few years, sorry.

amnblog

You cannot keep having defaults added to your credit file and expect tinkering with credit builder credit cards to sort it out.


You need a period of everything paid in full and on time to get yourself in the frame. (perhaps 24 or 36 months).


Plus, as ACG says you are being too ambitious with your maximum lending.


With regard to guarantors - these can be helpful if lending maximums are too low - they are of no use to improve poor credit situations.

Dave_Ham

You are likely to require a longer timeframe between now and when you purchase I am afraid.


If you have family around you that are willing to help, they may need to buy the property in their sole name and allow you to live there until your credit file recovers a bit.


May also be worth reassessing whether financially owning your own home is the right move at this current point.


Best of luck

kingstreet

HomeSaver wrote: »

Most recent was a default on 11th Jan 2015

Please clarify what you mean by the word "default" in this context.

HomeSaver

amnblog wrote: »

You cannot keep having defaults added to your credit file and expect tinkering with credit builder credit cards to sort it out .

I am disappointed at the judgemental nature of the above quote... I only got into the situation of having defaults after a serious illness, where I was in receipt of NO INCOME, and I was not physically well enough to intervene (in terms of writing to various creditors to ask them not to add defaults due to my hardship). I DO NOT habitually allow defaults to be added to my credit file and I DO NOT just tinker with credit builder cards to sort it out!!! This WAS eluded to in the original post.


I have applied for ONE credit builder card as advised by MSE to help rebuild my credit rating. I have NOT been behind on my regular day to day bills since commencing full time work however I was not in a position to pay off some other debts on top of these and they had already defaulted prior to me becoming well enough to work again.


I have a very good understanding of my financial health, and what I can afford on a month by month basis re: mortgage repayments.


I live within my means and save damn hard... I do not habitually operate in debt!

I also should clarify I said "houses I have looked at are 125k" that is not because I expect to get a mortgage for this amount... that is the average house price in the area that fit my requirements, and thus are the ones that I have seen.

I would like practical advice please not judgement!

HomeSaver

Dave_Ham wrote: »

You are likely to require a longer timeframe between now and when you purchase I am afraid.


If you have family around you that are willing to help, they may need to buy the property in their sole name and allow you to live there until your credit file recovers a bit.


May also be worth reassessing whether financially owning your own home is the right move at this current point.


Best of luck

Thank you for this reply

I have family who are willing to help... however my aim is to try and get properly on to the property ladder. It is financially viable to do it... it's just a case of how to do it.


I had been considering seeing if there was a route for family to buy the property and then I buy percentage shares in it on an annual basis until I am 100% owner and they have been repaid. By doing this I would avoid the impact my own credit history would have on a perspective purchase. Either that or I could speed it up in a few years time by taking a mortgage once my credit rating has improved... but I don't know enough about how to buy shares of houses without mortgages etc???

I don't know if this is anything some one knows anything about at all?