Poor credit score

louj22

I’m looking for some reassurance I suppose. 

I am a FTB and I know a house will
be coming up in a couple of a months that I have my eye on. 

My credit score is low due to historical issues such as missed payments and a default so I’m very much in the ‘computer says no’ camp. But my payments have been up to date for the last two and a bit years, I have a default for £700 which has been settled for two years and is now 43 months old. I earn over £50k and have a been in a professional job for 18 years. I have about 5k in debt on catalogues and CC which is all up to date but does have high utilisation but some will be paid down in the next month or so.
I want a 5% dep as I’m a single person and trying to reach £20k deposit is years away for me.

I’m feeling deflated because I cannot get past the DIP stage online and do have a couple of mortgage brokers who are going to look into things for me next week. Do I have any hope of securing a mortgage? 

K_S

@louj22 I can't say that you'll definitely get a 95% LTV mortgage with a mainstream lender, but based on the limited info in your post (2+ years clean credit history and just one default which is 3+ years old), you should be able to get a 95% LTV mortgage.

Whether that will be at mainstream-ish rates or specialist, that'll depend on the specifics. There are a few smaller lender who don't 'credit-score' (which is what you're failing at the DIP stage) and may be more suited to your circumstances.

If it turns out to be a specialist lender you could always plan to take out a 2 year fix and then remortgage to a mainstream lender at the end of it.

louj22

K_S said:

@louj22 I can't say that you'll definitely get a 95% LTV mortgage with a mainstream lender, but based on the limited info in your post (2+ years clean credit history and just one default which is 3+ years old), you should be able to get a 95% LTV mortgage.

Whether that will be at mainstream-ish rates or specialist, that'll depend on the specifics. There are a few smaller lender who don't 'credit-score' (which is what you're failing at the DIP stage) and may be more suited to your circumstances.

If it turns out to be a specialist lender you could always plan to take out a 2 year fix and then remortgage to a mainstream lender at the end of it.

Thank you for your reply. I just feel that I have turned things around, have good affordability, and currently pay high rent. I’ll speak with my mortgage broker properly next week and hopefully that will turn something up. 

Just feeling deflated every time I get a knock back. 

ACG

Its tricky without seeing your credit report but I reckon you could potentially get something around the 3.5% mark. 
As you say, high street lenders are probably unlikely but there are quirky little building societies which can offer decent rates and take a manual approach to underwriting rather than scoring your application. 

See what your broker comes back with. But definitely do not give up just yet. 

MalMonroe

Hi, nobody but you sees your credit score, although it can be a bit depressing when you see it's low. 

You do have a high income, so it's not all gloom and doom. If you can manage to get rid of that £5k debt altogether, that'd be good. Lenders don't like it when you have any debt hanging around. 

Speaking to the mortgage broker is a good idea, hopefully you can get something sorted out.  

simon_or

Definitely one for a good broker.

Don't pay anything silly in broker fees though, I don't think you fall in the really adverse pot, though you will be limited by the 5% deposit.