Can this be placed?

Xrayal

Hi everyone,

My partner and I are planning on looking for and buying a house from October however I have some adverse credit history and wanted your opinion if our situation could be placed with a high street lender or if we are looking at the sub-prime market. We intend to use a broker when we come to apply and obviously want a great interest rate.

Likely mortgage - £162k-£180k, Deposit £18k-£20k (90%LTV), can go up to £25k and decrease the LTV by a few percentage points if it sways a decision/better rate.

Deposit has been equally saved by ourselves - no proportion of it is gifted.

My situation - 27, earn £30057, pay 9.3% in pension contributions, also pay £300 in professional fees each year. No childcare, no car, student loan £93/month. Permanent job, with employer 5 years.

1 default - £450 registered October 2012, abandoned current account that charged a monthly fee - the fees took it into overdraft. I buried my head in the sand and ignored it. Paid in full, once a debt collection agency chased me for it, October 2013.
First credit card - had since 18, limit always £500 a number of instances where payment was 1 month late. Didn't always pay off in full every month. Card closed October 2014.
Mobile phone - A number of occasions when payment was 1 month late. Went Sim-Only from March 2014.

Permanently in overdraft (£2000, allowance £2200) until paid off March 2014 - never been in since.

Everything has been managed and registered ok since my wake up moment (October 2013). So will have a minimum of clean 2 years of managing debt in October 2015 and will have been permanently out of overdraft for 19 months. I still have access to overdraft. I was approved for a 0% Credit Card with Tesco Bank in September 2014. Stoozing £1k during the 0% period but always pay more than minimum each month, limit £1400. Use card for shopping, train season ticket and meals out etc. Have £3k savings, not including stoozed credit card cash and continue to grow them in addition to deposit contributions.

Partner - 32, earns £30000, doesn't contribute to pension (company pays in 14%). No childcare, no car, student loan £93/month. Permanent job, with employer 1 year, previous employer 8 years. Not seen credit report but tells me has never had a late payment or default. Had £9k credit card debt - paid off January 2015. Cancelled cards and now has one card with a limit of £1400.

Can we be placed? We think affordability is not a problem but credit history not perfect. I keep reassuring myself that not everyone has perfect credit histories and so there must be some slack in the system but my default really concerns me, although I'm not sure if lenders also factor in size of default, e.g. one for £450 not as bad as one for £4k!? I just feel so stupid for ignoring a debt of just £400.

Is there anything further we can do, other than dramatically increasing our deposit to lower our LTV, that would help a successful application?

ACG

With a 15% deposit I would say this can be placed at rates of around 4%.

There may be other options out there but i tink you really need to get all 3 credit reports infront of an experienced broker if you want to go to 90% or look at better rates than above as it will come down to the detail of those reports.

Xrayal

Thanks ACG. Out of interest, is the default the main problem?