Advice on my credit file..

MattLcfc

Hi all,


I'm just looking for a bit of advice with my credit file.


First of all, I'll explain my situation. I have only recently got married, and with a bit of money gifted to us, as well as a further £700/800 a month my wife and I are saving, we are hoping to be in the position to buy a house towards the end of this year. We are looking at properties in the region of 130k-140k with a 10% deposit.


My Credit Score on Experian is 836, which is classed as fair. I have the usual utilities bills with no late payments, a credit card with a limit of £1500, which is partially used and paid each month in full, and an overdraft of £300 which is not touched.


However, despite managing my money well in the last 2-3 years, before I meet the wonderful women that is now my wife I was pretty reckless when it came to finances.


I had a phone contract with Orange which I cancelled in 2012 when I was given a company phone, despite never defaulting there are about 10 late payments being shown between 2007-2012.


Between 2010-2012 I found myself in a horrible cycle of lending from Pay Day Loans. There are 24 recorded on my credit file, all showing as being paid in full and on time, but surely this can't look good at all?


I really just wanted to try and understand what my chances are of being able to gain a mortgage, with the late payments & Pay Day Loan records on my file? Do you think I'd be refused? If not is it likely I'd be likely to be paying high interest? or would lenders view my more recent records of managing money much better more favourably ?


Thank you

Candyapple

With lenders being so strict in regards to mortgages nowadays, chances are you won't be refused, but I highly doubt you would get offered the best rates. You would need to seek the advice of an independent mortgage broker when the time is right for better options.

If your PDL’s date back from 2010, assuming you won’t be applying for a mortgage this year, why not wait until at least next year so that some (all?) of them may have dropped off by then, thus making your file look better.

In any event, if your credit history isn’t spotless, most lenders will require you to have a higher than average deposit amount (20% and higher).

TimbaLanD

I think it will also depend on your income/expenditure. Having a dependant will also reduce theamount the lenders will lend you unless you want to include your wife in theapplication. Your wife should also havea good history. Speak to a mortgagebroker first as they will know the lending criteria of individual lenders andwill match one who will lend to you. This is much better than going directly to a high street lender. Good luck.

MattLcfc

It will be a joint application with my wife, who's file is pretty spotless.
We have no children as of yet and we bring in just over £2600 between us each month after tax, our out goings are about £1200 a month and we are putting away roughly £700/800 a month into a savings account.


I'd be gutted if my reckless past ruined our dream of owning our own home. I know we could wait a few years until the late payments & PDL have cleared from my file, however we are wasting £6000 a year in rent at the moment!

TimbaLanD

My experience with the lenders is as long as you candemonstrate that you have a steady income and your expenses don’t overrun, Ican’t see it being an issue. I am notcompletely sure but I think the lenders will lend between 3.5 to 4 times your salariesbut this will depend on individual lenders criteria. Say you have a combined income of 40k, you maybe able to borrow up to ~140k. If you’relooking at properties in the region of 140k with a 10% deposit, you’ll need toborrow 126k which is reasonable, don’t forget stamp duty, solicitors fees etc. 126k @ 2% over 25 years will cost your ~£535/month(repayment).

Most estate agents will have their own financial advisorswho normally will have a database of lenders and may even be able to provideyou an offer in principle which is based on the information you have provided.

Candyapple

TimbaLanD wrote: »

My experience with the lenders is as long as you candemonstrate that you have a steady income and your expenses don’t overrun, Ican’t see it being an issue. I am notcompletely sure but I think the lenders will lend between 3.5 to 4 times your salariesbut this will depend on individual lenders criteria. Say you have a combined income of 40k, you maybe able to borrow up to ~140k. If you’relooking at properties in the region of 140k with a 10% deposit, you’ll need toborrow 126k which is reasonable, don’t forget stamp duty, solicitors fees etc. 126k @ 2% over 25 years will cost your ~£535/month(repayment).

Most estate agents will have their own financial advisorswho normally will have a database of lenders and may even be able to provideyou an offer in principle which is based on the information you have provided.

That's all well and good, if your credit history is good. In this case, it's pointless info which offers no help to the OP’s situation given they have numerous late payments and a history of PDLs on his report dated recently.

If you are desperate for a mortgage, you will definitely need to seek the advice of a mortgage broker first and take copies of your credit report with you. They will be far better equipped to advise you on what lenders will be able to offer you a mortgage, rates etc. based on that than anyone here. Good luck.