New Mortgage Application bad credit not on file

mistertml

Hi All

Me and my partner are in the process of purchasing a property.

We have sold our current property and the proceeds from the sale will be going towards the new home.

I was hoping to put down over 10% but an earlier conversation with mortgage adviser has left me with some questions.

I had debt issues which have all dropped off my credit file, but I still make payments to 4 creditors (that no longer appear on the file but do show on my bank statement).

My credit rating is shown as excellent and the only stain so to speak is a credit card I paid off instead of letting it drop off.
The default/debt management is from 2010 but as I cleared the balance in 2016 it appears on my credit file.

I have been advised by the mortgage adviser that due to this coming up on my file and the payments being made to creditors the high street lenders will run a mile. So I have been advised to go with a subprime lender that have an APR of 5%. I had previously been advised we could get 1.99-2.5% with high street lenders.

I collectively owe around £4.5k and if I dont need to provide a 10% deposit I am thinking I should pay the debt off.

I have no other debt with anyone so my income to debt ratio is really good.My partners credit file is fine, but has a high income/debt amount due to HP car.

I would like your thoughts on this or if you are in a similar situation yo me then I would like to hear about this.

Thanks in advance.

ulldins

Just concentrating on your default, I assume the default date was less then 6 years ago? Clearing your balance date has no relevance to the default date.

mistertml

ulldins wrote: »

Just concentrating on your default, I assume the default date was less then 6 years ago? Clearing your balance date has no relevance to the default date.

Hi
This shows as a debt management programme as opposed to default as this doesn't appear to have defaulted.
dated:2015-2016.

Thanks

Thrugelmir

mistertml wrote: »

I had debt issues which have all dropped off my credit file, but I still make payments to 4 creditors (that no longer appear on the file but do show on my bank statement).

These will need to be declared. Being old one assumes that they are being paid off slowly. Which paints a very different picture to the potential mortgage lender of how you manage your personal affairs. Debunking your credit agency profile. Hence why lenders score you themselves internally rather than relying on external providers. CRA's don't lend money.......

mistertml

Thrugelmir wrote: »

These will need to be declared. Being old one assumes that they are being paid off slowly. Which paints a very different picture to the potential mortgage lender of how you manage your personal affairs. Debunking your credit agency profile. Hence why lenders score you themselves internally rather than relying on external providers. CRA's don't lend money.......

Hi
Thanks for the input.

This is the reason I queried this with my broker as they don’t appear on file but do show on my bank statement as an extra outgoing.

This is the reason why I’m thinking I should clear the balances. They won’t help me get decent rates now but should help in years to come, provided I don’t fall into debt?

Thanks

binaryuniverse

I too am interested in this subject, as I have one old debt I'm paying off, that isn't on my files. But planning to apply for a mortgage around the middle of next year.

So it seems the advice is to get my debt paid off, when my regular savers cash mature, at the start of next year. And just it clear it from my books in time for the application.