First time buyer ... credit defaults

dreamingofbuying

Hi,

I’m looking for some advice/experiences in relation to our current situation.

Ok so the easy part, my husband has relatively good credit history, no defaults or issues of note on his credit file. He does have a small amount of credit (£300-400), used and repaid regularly.

Now onto the complexity ... my credit history was shocking a couple of years back, in terms of defaults. Simply due to personal financial circumstances at the time and some irresponsible lending.

A few months ago, I was generously helped by my parents to settle these balances and all are now settled. So I have no outstanding debt. However below are the defaults that were on my account, which I realise are going to impact on my ability to buy a home.

2015
June £310
September £200

2016
January £330
March £968
August £1052
November £155

2017
February £164
March £117
September £703

I suppose I am looking for some guidance/thoughts in relation to what may be my options in terms of being considered for a Mortgage. Or where I might start with this? We have rented for the last 10 years with no missed or late payments (shame they don’t take that into consideration eh?!).

We have a £10,000 deposit saved already. Based on the house prices in our area (where we want to stay due to our daughters school) we are looking at requiring a 90-95% Mortgage.

Should I give up for the next while and continue to concentrate on improving our positive credit history? We would love to own a home of our own, so it would be great to hear experiences of anyone managing to get onto the property ladder with circumstances similar to mine too.

Thanks!!

dreamingofbuying

I should add, I do have a credit card with a small limit That I use a small amount on each month and repay in full. I was advised this would help. I also have a car loan, which is paid monthly and no defaults/lates/missed payments etc too.

obay

You have options, don't be worried.

You need to speak to a broker about this case.

scotgal30

You still have options, your options would widen if you could raise 15% deposit. My partner has less adverse history than you and this is what we were advised.

If you go to a broker and explain your defaults they can point you in the best direction - the fact they are all paid off now does help you!

ACG

Im not sure you have options at 90-95%.
I think you will need to either wait for 12 months (and keep everything clean in the meantime) or up your deposit to 15%.

There are lenders who you possibly fit with, but I think when it his an underwriters desk they are going to be concerned about the number of defaults and how spread out there are.

If you had 9 defaults in June 2017 then you could argue it was a life event. But you have had a couple for the last few years bar this year, so I think they will just want to see a longer period without any defaults.

I think you should probably be expecting rates of around 4%.

dreamingofbuying

Thanks so much for your feedback.

We have today paid to reserve a plot on the new build estate that we have been looking at (they released them sooner than we thought they would) ... this is the 3rd phase but they are releasing it in stages (we are stage2), with expected entry next September (2019). We were advised not to do anything in the way of mortgages etc until May/June next year. We will have to pay a further 'early bird' payment at the beginning of the year (£200) but thats about it till we finalise the missives etc.

Because it is a new build in Scotland and less than £200,000 house price, we are able to apply for Help to Buy I believe, which (if successful) would mean we require an 80% mortgage. We are hoping to put away another £500 per month over this time too, so will have a bigger savings pot too.

Do you think this sounds achievable? In terms of getting a mortgage at this stage, providing we stay squeaky clean until then. We had a look on a mortgage calculator based on our incomes combined and were looking at a max of around £250,000 but with the help to buy and our own deposit contribution we would only be looking at needing £151,500. Would that look favourable for us too? That we aren't borrowing anywhere near the "limit" we would be eligible for? Or would that not make a difference really?

Thanks again!