Mortgage chance with poor credit history

hollip0p

Hi all,

Hoping to apply for a mortgage with my partner in the near future. He has no issues on his credit file, but mine is less than perfect so I am trying to tidy it up as much as I possibly can to increase the likelihood of us being accepted.

We should have £20k saved up by next summer. We have a combined income of £65k and we’ll probably be looking at houses around the £250k mark. We are both first time buyers, if that makes a difference. We’d possibly be interested at looking at the HTB equity loan scheme, but not sure if my poor credit history would automatically rule us out?

My credit issues are listed below along with a few questions:
• I’ve dipped in to my overdraft a little over the last few months (£300 maximum) but from this pay day I am being really strict with purchases and will be avoiding my overdraft completely. How many months bank statements are lenders likely to want – I am thinking 6?
• Payday loans. Most recent was taken out November 2016 for £500 and closed May this year. I had a few others in 2014/2015/2016. Is this a deal breaker for lenders?
• I have four default entries on my credit file, all paid off via DMP and satisfied earlier this year:
o Overdraft £2053 from January 2013.
o Personal loan £11486 from December 2012.
o Credit card £2372 from January 2013. (Shows as two entries as the debt was sold on, but is the same debt.)
• I have no late payments showing in the last two years – except for on the defaulted accounts above. Do I need to be looking back further than this?
• I don't know if this makes any difference but there is no real reason for my debt issues other than the fact I was spending more than I earn. I've seen threads where people have advised that lenders might take things like divorce or hard times into consideration but I have nothing to justify my over spending unfortunately...

Are there any other red flags I should be looking out for on my credit file? The only thing Experian flags as having a negative impact on my score (which I know is virtually useless) is the fact I have a defaulted account, but I want to make sure I am being thorough.

Are we likely to have many options by next summer? Or would we need to leave it longer? I don’t know whether to approach a broker now for them to have a look through my credit file, would I just be jumping the gun massively as we don’t have our full deposit saved?

Sorry for the wall of text, we are just desperate to move out of rented accommodation and I feel awful that my poor credit history is holding us back!

Thanks in advance for any replies!

ACG

Im not sure about HTB as I do not do them, but in theory if you had a deposit, it could possibly be done now.

It is worth getting your credit reports over to a broker as there is a chance - most lenders only ask for 3 months bank statements.

hollip0p

ACG wrote: »

Im not sure about HTB as I do not do them, but in theory if you had a deposit, it could possibly be done now.

It is worth getting your credit reports over to a broker as there is a chance - most lenders only ask for 3 months bank statements.

Thanks ACG.

Would a broker not see it as a waste of their time to look at it as we won't be in a position to progress for at least 6 months or so?

From my point of view I would love someone "in the know" to take a proper look and tell me if I'm being completely unrealistic but I don't want to waste their time?

feekerry

I have a similar credit history to you apart from the payday loans and we are well on our way to remortgaging and releasing equity for Home improvement. We went to a specialist broker

ACG

Some may brush you off, others would happily take a look. I had someone call me last week who I originally spoke to in 2015 and nothing happened.

Personally I dont mind slow burners as you have a chat and then 6 months later or whenever it is, someone pops up and says they are ready and it is like a Brucey bonus all of a sudden.

Jaglad111

I can vouch for ACG, I contacted him in January for advice. In August I gave him my business and we get the keys to our new house this friday, so winners all around.

Steve_smith

I am in a similar situation.
My partner and I are also looking to buy. We are looking at the shared ownership scheme at the moment.
My partner has a good job earning around 30k and has a good credit score.
However, I do not have a good score and I believe it is currently rated as poor. I have two defaults on my file. Both under £500. These are paid off and from over three years ago. I have now joined the police and am a serving officer earning around 26k. I have been a PC for three and a half years so job security is pretty good for me.
We are looking at putting down possibly £8000-£10000 down as deposit.

Would it also help if my parents act as a guarantor for my side?

Desperately looking for advice regarding mortgages. We have been renting for two years now and have not had any issues.

Thank you.

YHM

Morning Steve

Sounds like you need a good broker. The two defaults may be an issue dependant on date and status.