Posted on 12 March 2012 by Tasha
During mid 2010 I lost my job and subsequently fell behind on my payments for bills etc. My credit wasn’t great to begin with but during this period it went to it’s all time lowest. I have since worked hard on pulling myself out of debt and tried to build my credit but it doesn’t seem to be making any significant changes on my ratings... I’m hoping to buy a house at the end of this year/ early next year with a 10% deposit saving. Is there any hope for me in terms of getting a mortgage. I am willing to go to lenders who works with people in similar circumstances as me but i have been giving conflicting information regarding these lenders. Some have told me the market still exists (albeit a very small one) whilst others have told me the market for these lenders no longer exists. My question is does this market still exist and if so what chance do i have of getting a mortgage?
This will all depend on what is registered on your credit file and when it occurred. There is a small market of lenders prepared to accept people with a less than perfect credit record but you will need a bigger deposit, at least 20% and the rates you pay will be higher than those available on the High Street.
As an example:
6.09% fixed until 30/06/2014 with a £1,995 for someone who has no more than 1 default in the last 24 months, maximum £1,000 and/or 1 CCJ, maximum £750 and/or 1 months mortgage arrears in the last 36 months. Compare this with a current 2 year Fixed rate of 3.89% with a £999 fee from one of the High Street Building Societies.
I think that in the meantime you need to increase the amount of your deposit whilst making sure all payments are made as they fall due and if possible satisfying and outstanding defaults or County Court Judgements. It is a tall order, but one that might just see you being able to purchase next year.
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