First Time Buyer

Dumayne23

Hello, So I was just wondering if anyone had successfully got a mortgage with bad credit?

My partner and I have found our dream house and have a 10% deposit, we have found a mortgage broker, by a family friends recommendation. Sounds pretty straight forward so far... the main issue is, I've got a default on my credit file from 3 years ago, its been satisfied but Im so worried, and actually starting to panic that we won't get a mortgage. I have a few other accounts in my name, Credit Card, Car finance, phone contract in my name, and a few closed accounts, apart from the one default (mail order catalogue) nothing has ever had a late payment. My partners credit file is fine (850-sh) on experian. Another issue is, we've only just paid off our student overdrafts, mine was £250 and his was £1900 we both have full time jobs and are renting at the moment.

Essentially, I wanted to know if anyone in a similar situation has had any success? We are looking to borrow 105,000,

Thanks

amnblog

You should have options and your Broker should have given you an indication of your chances.

What your broker cannot do is stop you needlessly fretting.

cjmillsnun

There will be options out there for you.

I have 6 satisfied defaults on my credit file for reasons I won't go into. I have had no credit issues since and have some cards and a mobile phone contract. All fairly low balances as I don't need the credit at this time. I am currently awaiting for a valuation survey to be done and if that's OK should have a mortgage offer soon after. This is with a major high street lender.

Again, don't panic, there will be a mortgage out there for you.

Dumayne23

Thanks for replying! I probably am just needlessly panicking, he said we had a 50/50 chance of getting one with halifax, but if not the should be able to get one with Monmouthshire building society. I still have a hard search on my file from applying for car finance, so is it worth us just going straight for Monmouthshire building society? Our credit card balances are also pretty high, mine is 630 out of 750, and his is 850 put of 1000

BattleToads

Have you taken into account the other costs such as solicitor fees and stamp duty? Are you able to use some of your deposit funds to clear/lower the credit cards?

Don't want to get a mortgage approved on the caveat that the credit cards are cleared and then being unable to do so.

Dumayne23

Yeah, we have money set aside for all the various fees. We can't really touch the deposit savings because we only just about have 10%. We both get paid this month so by the time we actually apply the credit cards should be at least 100-150 lower. My family have offered to help but i don't particularly want to borrow money off family if I can avoid it, but the option is there at least.

Dumayne23

Just a quick update, our broker just contacted us and said theres no way we could get a mortgage. We realised that my partner is also still in his probationary period in work, so that coupled with the bad credit, means another few months in my rented house that is too far away from everything...

Debtslayer

Are you using a whole of market broker?
The extra few months in rental will soon pass and you'll be in a much better position with your partners probationary period ending and hopefully you'll have managed to pay off credit cards. I would say they were a high factor in the decision as you are both close to credit limits.
You haven't stated your salaries, could these have been a factor also?

cjmillsnun

So less than £1500 will pay off the cards. That's a no brainer to me. Pay them off now and do not use them. You can then use the money you would've been chucking at the cards to pay them off to bring your deposit back in the few months extra you'll be renting. If you haven't got one and are going to be FTBs put the money in a HTB ISA.

After those few months are up, you'll be in a much better position.

Dumayne23

Yeah, he was a whole of market broker. The funny thing is we weren't even planning on buying for another year anyway, its just this house came up through a friend of friend type thing and we fell in love with it and got our hopes up so were both more than a bit gutted Houses like that one are very few and far between in my area, the sellers also gave us a massive discount so we would've had equity in the house from the second we moved in.

As for credit cards, were gonna use some of the money from the deposit to pay them off and then try to build a bigger deposit. Also going to look into the HTB ISAs because I believe we can both open one separately?

Thanks for all your replies everyone!

nikkih72

we were going to do HTB Isa, then found out it can only be used on houses less than £250K, we were gutted to say the least as we had saved but house is £300K, so couldn't use it