Getting a mortgage with adverse credit

dane1986

At the start of next year me and my partner are hoping to buy our first home together. We are looking at the help to buy scheme (equity loan) We will have a reasonable deposit at £15-£20k what easily covers the % we need. But here is the problem.

I had a couple of payday loans a few years back ,what are now all clear and paid. And 2 defaulted accounts from (llowel) that was an old credit card and a shopping account. Paid of last month. I now have no debts, apart from an overdraft that iv used a bit in the last few months. (To help pay of llowel etc) Are my chances of getting a mortgage completely demolished or is there some hope?

amnblog

If you were applying today, you should be accommodated subject to affordability.

redman1989

I'm not expert but from research and personal experience there a market for adverse lenders.

I have a joint application going through with Aldermore for a 10% LTV although I have seen some bad reviews and them not being as fast I liked the DIP, Application approval have both been done & my valuation is booked. Was getting a lot of back and forth questions but i suppose with adverse lending they need to cover more bases.

The more the % deposit increases the better chance you have for me personally I had 5 defaults all dated 4+ years ago and getting the 10% LTV I don't think i had MANY options maybe 3? although I've been informed I would be able to get a 15% LTV without much of an issue.

Just be persistent make sure you have no credit issues between now and when you apply and be prepared to pay a premium on APR.

Autumnleaves15

Use a broker when you're ready to start looking. We've used Habito which is a free online service and has been great so far. My OH has a default from a phone company from 4 years ago but less than £200. We've been advised to apply to a standard lender because it was a one off oversight and it was so long ago albeit still on his credit report. Still makes me nervous though!

I've heard a lot of people talking about London and Country as good brokers and there are lenders which might consider you but you'll pay more on interest.

dane1986

The key for the useful replies guys, the more information the better. I worked out I would need £14k deposit, to meet the 5% they ask. But I will be able to put down £20/21k so that can only be good with I’m proving my chances as it’s another 2.5%.

Il make sure going forward from now we have no more problems such as late payments, credit searches etc. I get that I might pay a bit higher interest rate, but I’m willing to take the hit to get on the ladder.

redman1989

And the way I see it in 2 years time you may be able to negotiate a better rate, for me all my defaults are gone in June 2021 hopefully the purchase on the house i'm trying to get has gone through by June this year (just waiting on the valuation from the Lender) so in 2 years i'll be in a position to get an attractive rate.

nattybuk

Well me and my partner have officially submitted our mortgage application yesterday with our broker (Habito). I scored “fair” on Experian credit rating due to credit cards and loans (these have all been payed of) my partner has a poor score on Experian due to being hit by Vodaphone for a default when her contract ended and they tried to take money out still (were still at the ombudsman).

Anyway the broker said Halifax would be our best shot as we have a 15% deposit, I have never been so nervous in my life!