Bad credit mortgage - your experience

[sadmamax]

I have bad credit. This is from taking on credit in my 20s and not being able to pay back the credit I'd taken on. I've also got ADHD which doesn't excuse it, but I think it's partially why my finances have been so chaotic.

I've not taken on any new credit for 3 years now, but I do still have some credit accounts with balances sitting dormant and me making no payments towards bringing them down (I don't really know what I'm expecting to happen here either!)

I've matured a lot ever since, but now I have 2 kids so any disposable income from my part time job goes on caring for them rather than being free to pay off any debt.

There's absolutely no chance of me ever getting a mortgage in this situation is there? Husband has a high amount of credit in his name (maybe 10k) and earns just under 40k a year and never misses payments and is always chipping away at balances to get the payments down.

Has anyone in a similar situation ever been able to get a mortgage or am I going to be set on renting forever?

I'd go and see an independent broker and talk about it. There are specialist lenders who help people with poor credit and there could be an option for you or they'll tell you what you need to do to get things in order.

https://mortgagekey.co.uk/bad-credit-mortgages?utmsource=google&utmmmedium=cpc&utmkeyword=mortgage%20for%20bad%20credit%20uk&matchtype=e&device=m&adpostion=%7Bapposition%7D&adgroupid=24134139293&gclid=EAIaIQobChMIzaiDD-rxQIVT-3tCh1T0w2TEAAYAiAAEgIALPDD_BwE

When I was in this position, I went to an independent financial advisor/mortgage broker who knew which companies would likely take me on, it did meant interest rates were higher, but it got me on the property ladder and I'm now in a much better position

I work in the mortgage industry and I agree with seeing a mortgage advisor . They should be able to check what lenders (if any) would accept you. As pp said there are several lenders for clients with bad credit so there is hope, however even if so, be warned you will have to jump through lots of hoops during the application process ( perhaps things like multiple years address history, landlord references, P60s, P45s the list goes on and on)

How much do you owe across how many credit cards?

Is your husbands debt £10k on a CC sorry?

The first thing I would do is work out how much debt you’re actually in. Then approach those lenders / credit cards and see if you can make some sort of arrangement to pay them off. You and your husband should have shared finances so between the pair of you there should be a way to sort this out.

First two things to do, try and get a list together of all credit you have, with balances, dates, and how much is being paid off.
Then go and talk to a broker, be honest, they will have heard worse situations and won't judge you, they will want to help you. You should then have a plan!

Honestly the fact that you've not being anything off your own balances for a number of years will come against you strongly. I'd start trying to pay these back each month even if only in very small amounts .

I used CLS Money and got a mortgage with a high street lender, despite being on a DMP and having 2 defaults. They aren't cheap but were worth every penny. Can't recommend enough.

What is your joint income and what are the total amount of debts? Also how much mortgage are you looking for? Could you work full time and put any extra money towards paying off the debts?

Thanks everyone for being nice and not ripping into me for being so irresponsible!

Our joint income is 50k as I'm only working for 18 hours a week while the little ones are in nursery so it doesn't leave us with a great starting point! The in laws are remortgaging this year and have said for us to expect cash from them towards getting a house but I don't know the exact figure they'll give us yet

I've got a trial on check my file to see exactly what my finances are and it's all very historical, I haven't taken on any new credit for 3 years!

I might get in touch with a mortgage advisor and just see what they think to stop my brain going into panic mode that I'll never get our own place!

I would, it will likely put your mind at rest and give you positive actions to take forward

There are lots of options please don't despair.
My partner had a CCJ for something years ago and we got a mortgage.

The loan to value comes into play so depending what the in-laws gift you as deposit money that'll help get you started.

A girl I work with couldn't borrow that much and had bad credit she went for shared ownership and that's got
Her on the ladder 🪜

Please don't give up hope on a family
Home, poor credit only lasts so
Long but a meeting with a broker
Would be good to get the ball rolling and see what you Need to do to be mortgage ready

Paying back what you owe others is a good starting point. Mortgage lenders will not look favourably on this, why should you pay them back if they lend you money if you haven't to other companies?

I went with simply adverse as a broker and can't recommend them enough. They were expensive but it was added to the mortgage and they had no issues despite debt and the mortgage being complex

I think you need to make some arrangements to start paying back some of your debt, even a small amount each month will look better than paying nothing.

You need to sort out what's happening with the cards. They can't just sit there forever. Are you paying anything at all, what is the total balance and is it increasing due to interest/charges? What exactly does the credit file say about them?

But I bet you owe hardly anything at all, if you describe your DHs £10k as 'high'. You might be able to pay them off when your ILs give you money, then save afterwards for a mortgage deposit.

If you can't get a balance transfer, can your DH get one for you? A big step to paying off credit card debt is minimising the interest you're charged so you can pay the balance off, otherwise you can just pay the minimum for years and it only covers the interest so you don't really ever get anywhere. Or it might be worth looking at the 'persistent debt' rules, where they can't charge any more interest after it's reached a certain percentage of the debt and they have to help you sort out a plan to pay the balance off without further interest/charges.

What did your DH spend the money on his cards? You need to approach this as a team, at the moment it sounds like you might have less to spend on yourself, which isn't fair, as your income is low due to childcare/PT working, you should have the same spending money and pay the cards off from joint money.