Mortgage with Adverse credit.

adamsvr

Hi everyone, have read this forum so much and find some great advice. 

I am going to be looking at getting a mortgage late next year. Me and my partner earn a combined £40,500 before tax. 

My partners credit history is limited but quite good, 1 credit card and 1 store card. No missed payments or anything adverse. 

My credit on other hand has steadily been getting better, No defaults, no CCJs but history of payday loans. Last one settled 1 month ago with 1 missed payments, 1 closed with 1 missed payment but have around 15 closed payday loans with no missed payments. I have 6 credit cards, all will have a £0 balance within next 2 months, never missed a payment. 2 cars out on finance (never missed a payment) but 1 will be paid at end of year. So will only have 1 car with a current balance of 11,500. 1 phone contract, no missed payments. 

Will hope to have a deposit of at least 25,000 on a property between 150-170k depending. 

Are my chances low or will I just need  a specialist broker?

runforlife

Your situation doesn’t sound too bad. Don’t forget that any debt will be likely to reduce your affordability, but not always. I would suggest a mortgage broker is an excellent idea. I am just coming out of a DMP though all my defaults are no longer showing. There were some payments on our bank statements which would have highlighted payments to a debt collection agency, hence credit problem. 

Pleased to say our mortgage broker has been brilliant and with an additional factor of us both being self employed we heard news yesterday that our mortgage application has now been approved 😊 Happy to pass on her details by DM if you want them. 

lonibra

I was in a similar situation as yours with slightly fewer payday loans and many more late payment 1s on the credit report. I was quoted ridiculous fees (£750 upon application and more after!) by some so called adverse firms but thankfully had the sense to run it past a couple of the advisers here on the forum (all of them very experienced) and used one of them to get a very decent rate, even with some additional complications to my income. So do talk to more than one broker to understand their fee structure before signing the dotted line. Happy to recommend.

ACG

You dont have bad credit? 
The only issue you have is pay day loans. You can use a broker or you could potentially do it yourself, you just need to check what the lenders stance is on Pay day loans. 18 months without a pay day loan and you could pick a lender at random and have a better than 50/50 chance of getting it right. 

CLJ2986

@ACG sorry to jump on but how do you check a lenders stance on payday loans? 

K_S

@clj2986 Generally speaking, for a layperson to check lender criteria/policy your best bet is to google <lender name> for intermediaries, go to criteria, and then look for the specific issue in the criteria. Not all mainstream lenders will have clear publsihed criteria of their approaches to adverse criteria, payday loans, or even sometimes what they consider as payday loan.

Specialist/adverse lenders will usually have more detailed criteria listed for these kind of matters.

Do keep in mind that it's rarely as black and white as described. For example, one lender's published criteria says "no missed payments in last 24 months" but I know for a fact that they will consider.

ACG

CLJ2986 said:

@ACG sorry to jump on but how do you check a lenders stance on payday loans? 

I tend to call our account manager. But you can also have a look for their criteria on their website.

adamsvr

ACG said:

You dont have bad credit? 
The only issue you have is pay day loans. You can use a broker or you could potentially do it yourself, you just need to check what the lenders stance is on Pay day loans. 18 months without a pay day loan and you could pick a lender at random and have a better than 50/50 chance of getting it right. 

This is reassuring to hear, my credit is only going to get better within 18 months also. I think I will stick to a broker because I honestly don’t think I’d know where to start and would rather have an expert on hand. Thanks for your reply.

Thanks everyone for the replies. Really glad to get some reassuring replies!

@runforlife happy to hear your mortgage has been approved!!