My partner and I have a combined income of ?56,000, We have a deposit of ?28,000 (inheritance) and are looking to become first time buyers at a price of ?230,000. We have defaulted debts that are being paid off, and previous https://paydayloansconnecticut.com/sherman/ history of payday loans from over 2 years ago from a time when our financial situation was much more difficult.
The defaults are about 18 months old. We started to try and tidy things up when we knew the money was coming to us. We currently owe around ?9,000 on the defaulted debts.
I have an active credit card, and we both have a mobile phone contract in our own names, but that’s all apart from the defaults.
When is a default recent?
Obviously a default a few months ago is recent and one 5 years ago is old. But many people have defaults in the middle, like Mr D.
- when did the default happen? the longer ago it was the less likely it is to show you have current problems.
- when did you repay the debt? High street lenders do not like you to have unpaid defaults, even small ones. And the longer ago the debts were cleared, the more obvious it is that you are now fine.
Pre pandemic, there was a common approach used by many high street mortgage lenders that defaults were OK on your credit record if they were all over three years old AND they had been repaid for more than a year. Mr D currently fails on both of those requirements.
During the pandemic, a lot of high street lenders stopped lending to anyone without a squeaky clean credit record. But in late 2021, mortgage lending has picked up a lot.
With recent defaults, your only option may be a bad credit lender
If Mr D wants a mortgage straight away, he will have to go to a bad credit broker.
Leave a Reply