Mortgage after a DMP

leighavfc

Hi

Recently i have been thinking about what i am going to do about buying a house after my DMP finishes. Currently I have around 14 months of payments left to make, but i am hoping to increase my payments in the new year to speed this up.

I really am desperate to get out of renting and get myself a house for me and my family to live in. Im sick and tired of paying my landlord a horrendous amount of money each month!! Now obviously i cant really do anything until i get rid of my DMP.

Now I have about 7-8k that my nan left me years ago when she passed away, which my dad has in some kind of savings account thing, (dont ask me what kind, because i havent got a clue lol). He has also said to me when they have moved house, which they are in the middle of, he will sort me some money out to help me out with the deposit for a house.

Now my question is, how long do you think it will be until i will actually be able to get a mortgage?

I know it takes 6 years for defaults to come off your credit file, my defaults came at the end of 2013 and start of 2014. Will these be counted from the day they defaulted or the day they were paid off?

Basically do i have any hope of buying a house in the next 2-3 years after DMP has finished?

Thanks

HappyMJ

If you don't like paying your landlord horrendous amounts of money each month then you won't like paying a mortgage provider horrendous amounts of money each month either.

Have you actually done a rent/buy calculation? It's rare for someone with a poor credit rating for it to cost less to buy. You have so many costs involved in owning a property. You will have mortgage application/valuation fees, solicitor/conveyancer fees, stamp duty and that's all before you even get in the place. Instead of the landlord replacing the carpet, updating bathroom and kitchen units and painting the walls on a regular basis you've now got to pay for all of that yourself. If you have a leasehold flat/property the landlord currently pays your service charges. If you buy it you now have to pay for them.

If you have very good credit and have a good level of deposit and can get a very low interest rate then buying becomes worthwhile.

I would wait until your credit report looks perfect before considering buying....in the meantime save as much as you possibly can in regular saver accounts earning up to 6% interest.

You can get a mortgage now if you wanted to. It'll just be much more expensive and in my opinion not worth doing.

ACG

If you have a 15% deposit, there are lenders who will do it once your most recent default is 24 months from registration.

So if your latest default was January 2014, it would be January 2015 before 1 or 2 lenders would consider you.

Definitely one for a broker, rates would be around 4.5-5% I reckon - although as to whether you would actually get accepted a lot more information would be needed. Speak to a broker, one with experience in adverse.

leighavfc

Hi MJ

Thanks for your reply.

Yeah i know what you mean but id actually just like to pay towards something that is mine so to speak rather than someone else. To be quite honest my landlord is a nice bloke but hes very slow at sorting stuff out. He had the place done up before we moved in earlier this year but the work is just a very poor standard and some of it is coming apart even now. I get the point about paying for stuff myself but i dont mind that as im very hands on and a lot of my family are different trades which is helpful.

I will do a rent/buy calculation when i get 5 mins. I will have to rent for the next year anyway as we want my boy to go to the local school, plus i want to clear my DMP asap.

The only other problem is that i dont really have much chance to save at the moment as my girlfreind only earns minimum wage for 25 hours a week, which just about covers her bills. This means i cover some bills and then all the shopping, fuel and stuff like that. We have another child on the way in Febuary so my missus wont be able to do more hours until child 2 is around 2.

Im guessing that i need to hold out for a few more years yet until i can do any of this

Wish i hadnt got myself in to so much trouble with money when i was younger.... such a numpty!!!!

leighavfc

ACG wrote: »

If you have a 15% deposit, there are lenders who will do it once your most recent default is 24 months from registration.

So if your latest default was January 2014, it would be January 2015 before 1 or 2 lenders would consider you.

Definitely one for a broker, rates would be around 4.5-5% I reckon - although as to whether you would actually get accepted a lot more information would be needed. Speak to a broker, one with experience in adverse.

Thanks for this.

I will have to check this out, i believe my last default was around April 2014 to be honest and not the start of 2014 as i stated earlier.

I will have to look into some brokers and see what they come back with. Hopefully there is something out there for me. I would consider having a high rate now and remortgaging when my credit file has settled. I will keep up paying my bills on time until i my credit file has a better score. Currently im on a very poor score of 489.

I have recently purchased a cash plus credit builder card to give my score a bump in 12 months or so. I also have a Vanquis credit card with a low balance on which should also help my file as they are made for people with bad scores.

Thrugelmir

leighavfc wrote: »

I have recently purchased a cash plus credit builder card to give my score a bump in 12 months or so. I also have a Vanquis credit card with a low balance on which should also help my file as they are made for people with bad scores.

Focus on saving a deposit (once your debts are cleared). The new Help to Buy ISA is worth taking a look at. More suited to people who require time to build a good deposit.