Can I get a mortgage

IwantAmortgage

Hello, 
I am wondering if there are any lenders out there for my circumstances.

I have 2 defaults that are 30 months old and a few that are over 3 years old. None are settled. I have 1 credit card with 2.5k outstanding that I paying off about 300 a month but it is 0% and can clear easily eith savings 

I earn 23k a year and I want to buy a house for 100k in Glasgow. I have a 5% deposit buy can stretch to 10 if I don't pay off my card. 

Will lenders be doing these products again because I was about to apply to be told that lenders for me don't lend here only in england and now they are not doing any mortgages but will that change after this virus please. 

Thrugelmir

Settling the defaults will go some way towards starting to repair your credit history. 

IwantAmortgage

I was told settling them wont help credit score so 

ACG

It will help, but I think in the current climate you are going to struggle.
You might have got a 90% mortgage last month but I dont think you will get a 90% one now. I think you need to wait for this corona thing to die down and see if the adverse market comes back to how it was as recently as last month. 

Unicorn_cottage

Personally I would concentrate on settling the defaults and sorting any debts. Homeownership can be very expensive so best not to be laden with debt when you first move in. Best to make your life as stress free as possible

Thrugelmir

IwantAmortgage said:

I was told settling them wont help credit score so 

Forget the score. You need to convince lenders that you are responsible when it comes to managing your personal finances. Why would they want to advance you thousands of pounds when you cannot be bothered to pay back what you already owe. Think of it as a beauty parade. Other contestants will be choosen ahead of you. 

[Deleted User]

"2 defaults... and a few", so at least 4 defaults on file?
The amounts will make a difference (e.g. £20 to a phone company and £40 to gas and it'll be less of a deal than multiple credit card defaults) but I can't see you getting prime rates with more than 1 unsettled default, with 4+ it's looking like an adverse lender.

You'll have to wait for the mortgages to pick up again and see what happens. It's not as easy as 'pay the defaults' or even the flip side and your view that 'defaults don't effect my score' - you'll need to get all information in front of a broker so they can give you some advise on likely rates/lenders etc. - but you can only really do that with any certainty when the adverse market picks up again.

The fact is settled defaults WILL look better to an Underwriter - but, depending on the amounts involved and what paying them would do to your deposit etc., you may find it easier to get a 90% mortgage with unsettled defaults than trying for a 95% one with settled ones. 

IwantAmortgage

There are 5 defaults on my file
One for a mobile company for £7 I came to the end of contract a month after I moved house so didnt realise that they sent a final bill and I've disputed this as I was sure I paid it all

One credit card for 800, a bank for 500, a payday loan for 300 and the last one I have no idea what it is for 130!

Thanks all. Maybe I wait a few months and carry on saving or pay of my defaults. Where can I find a good broker and also if I offer on a house and then I dont get a mortgage offered do I still pay the fees 

[Deleted User]

The problem you'll have is the perception of poor financial management. £7 mobile is minimal and on a 'good' case could well get ignored - but as you had issues before that, lenders can think that you should've paid far more attention to final bills/forwarding address etc.

I'm not judging you (I have historic adverse, so am completely aware of challenges people can face), but realistically I'd be amazed if somebody gave 95% whilst all that's on your credit file. Even 90% could be a push IMO (but I'm not involved in the adverse market, so maybe it's easier than I think!). 

I'd check your credit files across all 3 agencies (Equifax, Experian and TransUnion (used to be CallCredit)) - it's free if you only opt for the statutory/free report (do NOT get the 30 day free trial/score). Make sure everything is defaulted in line with when you expected - lenders have a habit of not defaulting people properly. Challenge anything you think is incorrect. E.g. if you stopped paying in 2015 and they didn't default you until 2017, then challenge it (via CRA or via the lender's complaints route) and ask for it to be backdated (there is ICO guidance on this) - it can make a massive difference if you get any unfair defaults backdated or removed.

For example, removing the £7 comms default might seem like not much point - but I'd rather underwrite a case with 4 defaults than 5! Likewise your payday loan... is there a possible affordability complaint that could be submitted? If you shouldn't have been given the loan in the first place, then the adverse would be removed - see https://debtcamel.co.uk/payday-loan-refunds/

Keep saving in the meantime. Is a smaller/lower value property possible? If you can live somewhere for a few years and then make a move and step up to 90% or more when your file is better, it'll be a heck of a lot cheaper for you (90% at an adverse lender won't be cheap, that's for sure) - but you'll have to factor in 2 house moves, 2 lots of legal fees etc.

Edit - Regarding making a house offer - Not sure as you're in Scotland. In England, it wouldn't be a massive deal, but not sure of the legalities up there.

Generally before you start actually viewing houses you'll need your AIP/DIP. Your AIP/DIP (Agreement/Decision in Principle) will give you a lending limit, as long as what you've told the lender stacks up later on (e.g. your income/expenses). You show that to the agent to show you're not just a chancer with no hope. To get a AIP/DIP approved, the lender would've looked at your credit file - so if they accept that, that's a good start. If they don't like your credit, you'll be declined (either automatically or by a human) and will have to try elsewhere.

RE: brokers - I'd look for ones you've either been recommended (by friends/family/colleagues), or on here. E.g. ACG who has posted on this thread does adverse cases. But make sure you get your credit files before contacting anyone, as they'll need to know the full picture including default dates etc. in order to help assess you.

IwantAmortgage

That's a really helpful response thank you. I have access to all my credit scores and everything seems correct  I didnt realise I could complain about the payday loan, thanks! I'll look into that. I had a really rough patch end of 2015 into 2016. I was in a financially abusive relationship and I was helping him pay his mortgage because he was telling me he couldnt afford it and him and his kids would be out on the street. So not only was I paying my own Bill I was giving him £350 a month too and I got so behind. It was a long time before I got back on my feet once I left him  

I will find a broker and get a dip or an AIP. Houses are cheap here so I can find something smaller if I need and yes step up the ladder earlier than planned if I do that but I just hope that lenders will understand that I've been squeaky clean for 30 months and I now have a reasonable job

Thrugelmir

IwantAmortgage said:

I just hope that lenders will understand that I've been squeaky clean for 30 months and I now have a reasonable job

Walking away from old debts says far more about you and your attitude as a potential borrower. If you struggle to pay £7 to clear a default on your own file. Then mainstream lenders may consider lending you thousands far too risky. Adverse lenders will charge you for the priviledge. There's no such thing as a free lunch.