Applying for mortgage with credit problems

[moneyhelp]

Hi folks,
I have a few questions
Approx 1.5 years ago i had my credit card revoked, i had a few bad months and ran behind on my bills
Also i had a loan for E4000 and missed a few payments
I contacted the bank for both issues and agreed to pay back the full amount month by month.
I was paying back atleast E800 a month off loans and also E500 a month on rent.
both loans have been fully paid in June.
Since then i have been completed free from any debt and have been saving E1200 per month.
I have been working in the same computer company for the past 8 yeares
I am hoping to apply for a mortgage in january with my partner.
What are the chances that i will be successfull in my application.Should I been doing anything else before applying to increase my chances of approval.I have been told that it is a good idea to go to a broker with my credit report and explain why i ran into problems with my loans. is this a good idea???
i have been extremely stressed over the whole situation, but i know that it is my fault for getting into such a situation.
Any feedback is greatly appreciated
Thanks....

 

[Eurofan]

Re: Mortgage Help!!!

Since then i have been completed free from any debt and have been saving E1200 per month.

Be completely upfront about this. While the missed payments will appear on your credit history (do check it out yourself like Clubman suggests) banks are most interested in history and ability to repay.

The fact that you have totally cleared your debts and have been saving a substantial amount each month will stand to you. Leave the stress behind you at this stage you have demonstrated a willingness to take control of the situation and should take pride in that. You've obviously learned a valuable lesson from the whole situation.

Don't be in a panic to get on board the property market either. I'll declare my bias as a bear in this regard but check out the other forums here and make up your own mind.

Well done on getting your finances in shape!

 

[moneyhelp]

Re: Applying for mortgage with credit problems!!!

Clubman
I have changed the title of my post, hopefully its ok now.
i have requested a copy of my ICB credit history records last week so should be in the post this week.i suppose i'll now from there what my chances of approval are...
thanks for your posts and your words of encouragment

 

[moneyhelp]

Re: Applying for mortgage with credit problems!!!

another short one.
would i be better going to the bank myself and explain myself or would i be better off going to a broker to represent me.
If so who are the best brokers to deal with for this....

Thanks

 

[ACA]

Re: Applying for mortgage with credit problems!!!

I would have thought that your own bank would have been the best place to look for a mortgage first. Their aware of your history, good and bad, and should be able to offer you a competative rate.

In January, you will have only 6 months of 'good' credit history - which may put off other lenders. Some mortgage providers will make out that they can only give you a mortgage with a massive deposit or with extortionate rates of interest as they deem you 'high risk'

I'd tread very carefully - make sure you're not paying for your short-term lapse in good judgement for the next 25-30 years!!

 

[Satanta]

Re: Applying for mortgage with credit problems!!!

i suppose i'll now from there what my chances of approval are...

Do remember that the ICB report isn't a credit score or risk in itself. It's used in different ways by different lenders to draw up your credit rating. So just because one lender might say no doesn't mean they all will/would......

It's been said many times that going through a broker in a situation like yours can be beneficial.

The advice above (Re: your own bank) would be a good start. I'd try and arrange a metting with someone (as senior as possible) so that the entire case can be put forward, good and bad. After that it's simply a case of putting your head down and fighting for the best deal (something you should consider doing even if you go through a broker - the likes of NIB only deal directly so you'd be missing that offer straight away without some of your own leg work).

 

[lff12]

Re: Applying for mortgage with credit problems!!!

Hard to say really what your options are.

I would think that going for a mortgage only months after clearing off credit problems might fail as the debts are still "fresh" in the recent history. A friend of mine had a spot of trouble getting a 100% loan and one of the reasons was because she'd missed a couple of payments about 4 years ago - and it was brought up.

Depends of course on what size the mortgage is and various other issues like what your income is, how much of loan you need and what the house is worth etc.

Would be best to discuss with a broker who'll be up to date on what the current requirements are.

I cleared off my debts 3 years ago and still have occasional problems getting credit. Wouldn't even think of applying for a mortgage for at least 2 years so the record with ICB is squeaky clean at least.