Mortgages after bad debt

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Aimingfordebtfree
Aimingfordebtfree Posts: 2 Newbie
in Mortgages & endowments
Hi
Okay, I’ve never been this open about money before, I’m pretty embarrassed by my current situation.

My situation:
Currently I have £9,500 in bad debt from systematic use of payday loans and a £2000 overdraft. 4 of these debts are currently with debt collectors. I have made a spreadsheet and will be able to pay off this debt by November 2020 if not before.

My partner doesn’t know I’m still in this debt, I cleared some with his knowledge around 2 years ago. I had taken payday loans to get me through my student and graduate period.
However, I need to start planning the future.
My partner took a mortgage by himself as I discussed my credit score was appalling and agreed to pay him rent and pay for our wedding in 2021. He has a perfect credit score and has never been in debt.
Once we are married, we will look to buy a new house in 2022 as the mortgage he has now is fixed until June 2023.
How long should I wait before applying for a mortgage with him?
My last bad debt payment will be approximately in July 2020 and I have an improved salary and expected this to continue improving in the next 3-4 years.

Thank you in advance.

Comments

  • JayCeeEssex
    JayCeeEssex Posts: 49 Forumite
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    Without actually reviewing your full credit file, it is very hard to say.
    Firstly, you will have to accept that there are many lenders who will not entertain anyone who has even taken out a pay day loan, let alone defaulted on one! Generally speaking, 'High Street' lenders will expect you to be squeaky clean. You might find the Halifax a bit more sympathetic than others, but in all honesty until your credit file shows at least 4 years completely clean you will be looking at specialist and niche market lenders.
    Having a game plan in place for clearing the debts is obviously a great step forward, stick to it, you will get there!
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts I may make are for information and discussion purposes only and should not be construed as financial advice.
  • Aimingfordebtfree
    Aimingfordebtfree Posts: 2 Newbie
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    Thank you for replying.
    I have set up payment plans with all of my lenders and if I was to ensure every payment was made on time every month in those 4 years, would that count as being clean? Or will the loans still stay on my file from the date they are paid?
    When does the time clock start with my loans coming off my credit file?

    Thank you
  • JayCeeEssex
    JayCeeEssex Posts: 49 Forumite
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    Again, it is not that straightforward. Adverse credit as you know will stay on your credit profile for 6 years and will be in plain view to all lenders. A lot is going to depend on how you have conducted your accounts over the period of bad debt and if your profile is improving.
    I would certainly be tempted to take a look at the Halifax sometime after July 2020. Obtain a decision in principle from them on a property price that you feel you and your partner could afford. If it is kicked into touch, that is not a problem as Halifax carry out 'soft footprint' AIP's so no damage done to your profile, but at least it will give you an indication as to whether you are moving back into the mainstream market!
    Hopefully that has helped a bit?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts I may make are for information and discussion purposes only and should not be construed as financial advice.
  • smithers1981
    smithers1981 Posts: 824 Forumite
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    Surely if you plan to get married and spend rest of life together you should come clean with your partner. then tackle this debt together?

    i would certainly want to know, and if you can't tell him then that says something about your relationship
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    smithers1981 wrote: »
    Surely if you plan to get married and spend rest of life together you should come clean with your partner. then tackle this debt together?

    i would certainly want to know, and if you can't tell him then that says something about your relationship

    Seconded. Trust is an essential part of any relationship. If you tackle this together. Then the issue will be resolved far quicker. Simply sweeping the matter under the carpet may come back to bite you. At the most imappropriate time.
  • smithers1981
    smithers1981 Posts: 824 Forumite
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    Also debt is nothing to be ashamed about, face it head on good luck
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