Would we have any chance of a mortgage?

[homeownerwannabe]

Looking to buy hopefully next year if we are able to get a mortgage.
After years of being in debt and finally getting our way out I'm worried we're still paying for past mistakes.
I know this is a "how long is a piece of string" question but I'm wondering if anyone is really knowledgeable in this field that can maybe help.
We would hopefully be looking for a £200k mortgage and have a 20k deposit which we are hoping to add to (we live in a cheap area)
I have one default on my credit file from 2017 and dh has a few missed payments from 2017. We used to be up to our eyeballs in payday loans but these have all been paid off for about three years now.
We both sit in around the 720 points mark on Experian, and 420 on clear score which is around the middle of the fair zone (I know credit score isn't really important but just to give an idea of where we are)
We still spend too much every month and really need to cut back and save more, we are tied into a private rent contract till next summer so have a bit of time to improve on the three months bank statements I will expect they want.
I'm just wondering if the payday loans/default etc will be a huge problem as I get so much mixed info online.
Also dh and I have separate accounts with separate banks, if we are looking for a joint mortgage are we better to have a joint account?

How much do earn?
You need to stop over spending yes...otherwise the bank will deem you not able to afford a mortgage
Yes I think default will have an effect for a certain amount of years but I'm not too sure on that one.

And I don't think separate accounts really matters as long as you are saving and all your accounts are "clean" as such. The less accounts the better really though.

Joint account not an issue

Missed payments will drop off after 6 years, one isn’t probably a huge deal but if your partner has a few it will be.

I’ve never had a psy day loan but my broker asked about them, my understanding is it’s a huge red flag for lenders.

I’d recommend talking to a broker, they will be able to give you specific advice for your situation.

Assuming all your issues (defaults, missed payments, payday loans) are over 3 years old then you should have no problem at all, assuming you pass affordability and have high enough salaries etc etc.

You’ll need a good broker and won’t be able to go with a mainstream lender or get market-leading rates but I’d expect you to easily get something between 3-4%. You’ll probably end up with a specialist lender like Aldermore, Kent Reliance, Kensington etc but it’ll only be for the short term — the negative marks will drop off your credit reports after 6 years and then you can remortgage with a mainstream lender.

What crashbank said. Concentrate on sorting your budgeting and outgoings while you are renting, to show you are managing your finances with focus on reducing commitments and increasing available income/ savings. When you are ready to start looking, see a good broker first. And well done for getting back on track.

I've just got a new mortgage. We went through a broker who specialises in 'bad credit' mortgages. I have a default and some missed payments and myself and dp both have low credit scores. Interest rate is higher than high street lenders but still affordable.

Just been through this myself.

Default from 2015/2016 as well as a couple of other niggles in the credit history.

Accepted but had to put down a 15% deposit.

Good luck OP! I spent many many sleepless nights googling about mortgages with defaults so I’m happy to be able to report a positive outcome for myself to encourage others.

Hopefully you will be able to get a mortgage, although you will pay slightly more than a 'clean' applicant.

I remortgaged my way out of an IVA about 15 years ago, using a broker. Although things have changed post 2007 crash, it's still likely that there are products available to you.

Absolute best thing you can do is cut your spending to see if you can boost your deposit. If you know you're overspending, and you cut this down really well, you might even be able to boost your deposit past 15 or even 20% which will really help your cause and possibly tip you over into a cheaper percentage LTV bracket.

If you haven't done so already, go through your budget with a fine tooth comb, make savings on everything you can and perhaps put aside a small amount for free spending (£50-100 pm?) on a 'when it's gone it's gone until next month' basis, so you can have some treats, but are mainly concentrating on boosting your mortgage deposit. Have a look at the Moneysaving Expert money makeover and view it as a six month project, for a start tell people that you aren't exchanging Christmas presents this year as you're saving hard for a house deposit so that will help if you're normally the type to spend hundreds exchanging things that no-one really wants or needs. The time will fly by.

www.moneysavingexpert.com/family/money-help/

If you're under 40 do you both have LISAs? You can put in a certain amount this tax year and also next tax year, so from 6 April?? and the government tops it up by 25%.

I went through London and Country, for my mortgage and subsequent remortgage, they were brilliant. Managed to find us a really good deal even though my partner had had a previous IVA.

Thank you everyone, for so long the thought of buying a house was as likely as walking on the moon, we were in so much bother with debt! Constant phone calls from company's, letters through the door every day, money coming in from wages then the next day we were back to the over draft limit when all the minimum payments for the credit cards came out 😰
We have been on track paying every thing off for about four years now and it would have taken years longer but (luckily for us) dh got a good redundancy package from his old job and managed to walk into a well paying new job so we were able to pay everything off and have a lump sum left over.
Thing is after years of struggling we have probably been too reckless the last 6 months spending what we want and eating out quite a bit, it's time to knuckle down and think about the end game.

@TheDoctorDances I actually got a mortgage in principle from L&C which I was so excited about as usually we would get refused any kind of credit but seemingly they just go off your figures and not actually do a soft credit check so I was expecting a big fat no at the next stage from them. Good to know you've had a positive experience with them.