FTB with bad credit but good deposit

johnthebar

I wonder if anyone could help me with a query. My partner and I are looking to buy our first house as we are sick of chucking £900 a month down the drain. We are based in London and are looking at properties around £250-260k. We have 60K to put down as a deposit and our combined annual earnings are around £65k.

I think in normal circumstances we would be able to get a mortgage for this. However after I graduated from college about 3 years ago I got into a bit of financial trouble and defaulted on a credit card for about £700. I am just about to finish paying this off from the agreed payment plan, however it has affected my credit rating. I was recently turned down for a mobile phone due to bad credit, but was able to get another credit card (which is very much under control). The only debt my partner has had has been an overdraft which she has paid off.

I was wondering if we would be wasting my time with any high street lenders with my credit rating? and was wondering if lenders will take a relatively large deposit into account against any previous credit history problems?

Thanks

Mortgagehero

It's true that some high street lenders will maybe refuse you at the moment due to what happened, however it is always recommended that you try them first to allow them to see if your overall situation is acceptable to them.
If this comes back negative then I am sure that there will be another lender that will look at your case favourably. This may be at the cost of a higher overall cost deal but again nothing ventured........... as they say.

sarkin

Chelsea building society will take some adverse for FTB may be give them a shout. If not contact a mortgage broker in your area

luckyfool

Chelsea BS will allow up to £3,000 in satisfied defaults on their standard range, Accord Mortgages (broker arm of Yorkshire Building Society) tend to allow 1 default, and Abbey also have a reputation for being a bit flexible in this type of situation.

The deposit that you have to put down will obviously help massively as an 80% ish mortgage represents much lower risk to the lender compared to the 90,95, and 100% mortgages more typically required by a first time buyer. With that in mind if you both have other well maintained credit then a small blip from a few years ago should be something they can get around.

I would make sure you finish paying off the default, and advise the lender when applying that the default is there, that it has been paid off.

cheers

luckyfool

herbiesjp

Your first port of call should definitely be a prime lender - as opposed to sub prime lenders (lenders for applicants with advserse credit history).

There are plenty lenders that are flexible enough to look at this for you - as long as it is a one off, with a good explanation, then there are plenty lenders that could agree this for you due to the great deposit you have set aside