Mortgage ability due to credit issues

Cabincrewcasey

Our credit ratings are atrocious, we know that. Multiple late/missed payments and defaults/ccjs.

since early last year we’ve tackled things head on, built up some savings, repaid a lot of debt, paid off a lot of the defaults and all the ccjs.

we want to apply for a mortgage in late 2023 when we should have a 10% deposit if not more

at that time, we’ll still have some late payments and 9 defaults between us. All of the defaults will be at least 4 years old and under £500, except one for a phone contract which is £1200 and from nov 2020.

will these make. A mortgage impossible?

london21

You will likely need a broker who will be able to assist with your situation. 

You might need to deposit a higher percentage but a broker should be able to advice you.

Cabincrewcasey

We’ll definitely use a broker in any case, but hoping 10% deposit will be enough, incomes of £32k and £46k, no debts such as car finance etc by the time we apply either.

just unsure if 9 defaults between us would be a brick wall 

csgohan4

The sooner the defaults are tackled the better your history and the more you can borrow. Good luck. Time heals history

Cabincrewcasey

csgohan4 said:

The sooner the defaults are tackled the better your history and the more you can borrow. Good luck. Time heals history

csgohan4 said:

The sooner the defaults are tackled the better your history and the more you can borrow. Good luck. Time heals history

Hi, the defaults have been/are being tackled. We have approx 14. 1 I have managed to negotiate the removal of subject to repaying it because they can’t produce the default notice. The next 4 drop off before mortgage time.

the 9 we will still have at mortgage application time I will have repaid in full except the £1200 comms one.

I am hopeful I can negotiate to get some of these removed but that’s another subject, so assuming I have all 9, would that mean we were unmortgageable or would we get something somewhere realistically?

csgohan4

Cabincrewcasey said:

csgohan4 said:

The sooner the defaults are tackled the better your history and the more you can borrow. Good luck. Time heals history

csgohan4 said:

The sooner the defaults are tackled the better your history and the more you can borrow. Good luck. Time heals history

Hi, the defaults have been/are being tackled. We have approx 14. 1 I have managed to negotiate the removal of subject to repaying it because they can’t produce the default notice. The next 4 drop off before mortgage time.

the 9 we will still have at mortgage application time I will have repaid in full except the £1200 comms one.

I am hopeful I can negotiate to get some of these removed but that’s another subject, so assuming I have all 9, would that mean we were unmortgageable or would we get something somewhere realistically?

Criteria and risk appetite for lenders changes all the time, what a broker says now may change at the time of application.. No harm in speaking to one now to get an idea, but I suspect you will need a paid broker at the time of application if you still have ongoing defaults to be paid

ACG

At the moment you would struggle with a 10% deposit I think. However, assuming the defaults are all over 3 years old at the time of application I think you will have options. Probably not normal rates, but maybe not far off. 

Cabincrewcasey

Hi, thanks for the replies, 

if for example I had a 5 year old default for £450, would paying it off make a tangible difference vs applying with it unpaid?

csgohan4

Lenders look at you credit history, any unpaid defaults shows a person ability on paying debts and/or racking up debts. 

Would you lend to someone with no defaults to someone who still hasn't paid it off?  Who will likely run into trouble and risk repossession statistically?

Cabincrewcasey

I wouldn’t but then I’m not lending someone a six figure sum of money, hence why I asked x

csgohan4

Cabincrewcasey said:

I wouldn’t but then I’m not lending someone a six figure sum of money, hence why I asked x

Exactly. The principle is the same as lenders risk assess applicants, and anything other than squeaky clean/vanilla they will need to assess with a fine comb and internally score. Likely with higher interest rates too to reflect the risk.