mortgage and history of payday loan

peterpedro1980

hi all,

just looking for a bit of advice, a few years ago i ran into a bit of trouble and ended up with debts and getting payday loans most months. all my debts are now showing as settled / satisfied. as of march last year

however i still continued to get pay day loans up until last month.

i will be soon coming into some money, £ 30'000 more or less and am hoping to use this as a deposit for a house.

has anyone with this kind of history managed to get a mortgage or know anyone that has is my ultimate question ?

my credit score obviously is 1 out of 5

thanks in advance

kingstreet

Get all three versions of your statutory credit file and put them in front of an independent mortgage broker.

The PDL activity will be less important than what;-

i ran into a bit of trouble and ended up with debts

actually means...

peterpedro1980

the trouble part was just basically getting loans and credit cards, leaving my partner at the time and having to set up a debt management plan...as i could no longer afford them, all those are paid off now

Madbags

Nationwide asked me for a "Reason for adverse credit" when we applied for our mortgage. Chances are your lender or broker is going to request the same from you.


I had to write a letter explaining what happened, why it happened, how I sorted it out and how things are better now. I was in a similar situation with Payday Loans and it got out of control to the point I had to obtain a Debt Relief Order in 2011.


But there is light at the end of the tunnel. We got our first mortgage in December, 69% LTV.

kingstreet

ozzyosbo wrote: »

the trouble part was just basically getting loans and credit cards, leaving my partner at the time and having to set up a debt management plan...as i could no longer afford them, all those are paid off now

Yes and what made up those debts and what remains visible on each version of your credit file is going to determine a strategy for your broker.

peterpedro1980

thanks both,

would the large deposit not make any difference?

justcat

How much is the house you plan on buying?

kingstreet

As you don't give us any perspective, of a loan to value or purchase price, we can't say.

If it's 25% deposit it will be more help than if it's 10%!

peterpedro1980

im looking for between 85 k - 120k with a 30k deposit

kingstreet

Okay, so it's more like 25%.

Now order all three credit files and find a good broker. Until they know what is visible, dates and amounts concerned it's impossible to speculate on what might be possible.

A couple of small defaults over three years old and no recent missed/late payments may mean high street rates. Worse or more recent and it will be at a higher rate.

peterpedro1980

thanks for you help