Louise has just moved into her first home and is urging other people who may have had bad credit history not to give up hope of getting on the property ladder
Louise has just moved into her first home
Mum-of-three Louise never thought she would get approved for a mortgage due to her bad credit history.
But after moving into her first home with her family, the 43-year-old is now urging other people who may be in a similar situation not to give up hope.
Louise and her husband started saving for a deposit six years ago, but she did not think they would actually be able to buy a home anytime soon, after previously being in £15,000 of debt and having defaults on her credit file.
Most negative marks, such as missed payments and defaults, stay on your credit report for six years in the UK. If you have bad credit history, getting a mortgage is not always impossible – but there are things to be aware of.
You may need to seek advice from a specialist mortgage broker, as your options will be smaller than someone with good credit history.
For example, you may not get approved with a high street bank. You may also be asked to provide a bigger deposit, and your interest rate may be higher.
Louise told the Mirror: “It was my credit that was bad. My husband was fine. I had made some silly decisions when I was younger and I had some defaults on my credit file, which I was aware would stay for six years.
“Although we were saving, we thought it would be a long time before we could get a joint mortgage. We actually looked into my husband getting a mortgage just in his name, but that’s not really what we wanted to do.
“Just on one wage, the house prices we could get were not really what we wanted. Some places just wouldn’t even look at me.”
Louise explained that her debt was made up of old catalogue credit and credit cards, but she is now debt-free.
She added: “It was poor decisions on my part. They’re all cleared now – but unfortunately it stays on your credit file. I had started clearing all my debt and I was on a debt management plan.
“The defaults was what, in my head, was stopping me going any further with a mortgage. One of them I was still paying off from when I was 18 years old.
“There was a time when they were just throwing credit cards and overdrafts at you and I was just young and stupid. I just wasn’t being responsible enough with money.”
Louise and her husband are both in full-time work, which meant they could pass the affordability checks for their monthly mortgage repayments.
But she had pretty much written herself off from having a mortgage, until she spoke to a broker who looked at their options. Feeling worried before applying for a mortgage isn’t uncommon.
New research from the West Brom Building Society reveals 36% of first-time buyers felt nervous about the mortgage process before even getting started, while 32% said they felt overwhelmed when taking out their first mortgage.
A further 44% admitted they didn’t fully understand the process, and 37% had heard that getting a mortgage was “stressful” or “difficult” prior to applying.
After speaking a mortgage broker, Louise and her husband were able to get approved with a mortgage from the West Brom, who looked past the blemishes on Louise’s credit file.
She added: “We didn’t realise getting a mortgage, a lot of it is affordability as well, and the future – how can you afford it. I’ve been in my job for 25 years this year.
“We never got our hopes up and when they came back to us, we had a celebration. They rang me when I was driving home from work, I had to pull over – I was physically shaking. I was just so happy. I always thought it was me holding us back.”
Louise and her husband were approved for a mortgage on their £192,000 four-bed home in Prudhoe, Northumberland, with a 5% deposit of £9,600.
The family are currently locked into a two-year fixed deal with a rate of just above 5%, which they hope to bring down when they remortgage next year.
While renting, the amount the couple could save fluctuated every month – sometimes it would be around £50, or it could be much higher if one of them took on overtime hours at work.
Louise said: “We just saved what we could. We just thought it would be nice to have our own place eventually, but we didn’t think it would be many years into the future, like when the kids move out.
“We were renting, we have three kids – so it just felt a long way off and we were saving what we could.”
To other people who may assume they won’t get a mortgage because of bad credit history, Louise said: “Don’t give up. Don’t be disheartened.
“A lot of time now, people are paying such high rents – you can show affordability. If you’ve got an income but you’ve got adverse credit, it is possible – it isn’t just a dream. Stay positive.”
