Mortgage - Bad Credit Rating

munchybanana

Hey, looking for a little bit advice before we go to a broker about this. I had 2 loans with AIB which I stopped paying for about a year. I have since restarted paying them (i agreed a weekly rate with a debt company who I pay) and have about 2 years left before i'm finished paying them off completely. There was also a credit card on my account for 1.5k which has been wrote-off but I am in contact with the debt collectors to see if there is a way I can pay it. I know how stupid I was for not paying them at the time but I am making an effort to amend my wrongs now. Do i need to wait 5 years after its fully paid before it leaves my credit report or would we even be considered in 2 years when its all paid off?

Is there any hope of my husband and I ever getting a mortgage or am I wasting my time? We are saving and will have a deposit saved in 2 years or so. We are in a fortunate position that we have a site, need a small enough house and our parents will gift us some money so we will not need a huge mortgage (maybe 60k or so)?

Any advice would be appreciated.

TheBoyConor

With that history I'd say forget about getting mortgage with your name on it. Your husband might be able to get one in his name alone perhaps, if he is clean.

A bank will look at that and say "well this one has a very bad history of failing to honour debts - why would we take that on?"
And I'd just like to point out that you are not paying back your loans to AIB. As for as AIB are concerned, you totally welshed on the deal and they had to sell your loan off to a debt agency. To top if off you have had a debt write off on your credit card. That basically means that they gave up on trying to get you to honour your debts because you weren't going to.

Would you yourself give a loan of money to someone who you knew had a track record of not paying back loans despite promising to do so?

T;dr You won't be getting a mortgage.

dazed+confused

Not going to beat you up on this one or repeat what anyone else has said.

But as others have said, I'd say the chances of you getting a mortgage are pretty slim.

That doesn't mean you can't build a house though, it might just be in 3-4years time instead of 2.

If I were you I'd save for an additional year and in the meantime pile all of your savings into the credit union. You won't need to borrow as much then and if you have a good savings history the credit union will give you a €40k personal loan.

If you cleared his over 10 years you'll own your house outright much quicker than if you had a mortgage.

Fol20

If the loan is small. Another more expensive option you could look into is trying to take out an unsecured loan. Interest will be close to 10pc and your credit history might not allow this either but an option.

Look into finance ireland. They have different rates for people with bad credit history - Iv never used it myself but when I was browsing, I noticed it.

munchybanana

Thanks so much for all the replies! I kinda knew already it would be a miracle but said i'd ask. I know I massively f**ked up by letting things get so bad in the first instance but it was a difficult time and I allowed it all to get on top of me. I am trying my best to write my wrongs.

I will look into the credit union loan as a possibility further down the line and if not will rethink our house plans and see where we can shave off the extra money we needed until we can save some more. I'd rather not go with a high interest loan if it can be avoided.

Thanks again all!

Bandana boy

You will get a mortgage it probably will not be cheap though .The main players who are the cheapest will probably say no but you will get one of the sub prime guys to give you a loan .
But you cannot change the past and all you can do is put your best foot forward now , pay of the debts save as much as possible go see a broker and see what your options are.

Trish56

OP the first thing you should do is apply for a credit reports to www.icb.ie and www.centralcreditregister.ie just to see how bad your credit history is and if the credit card debt is on them.

I would then go to a broker with them and get advice - Finance Ireland would be one lender that may consider your application and a broker may advise you to build up a savings history and clear any o/s debt before approaching a lender depending on your credit reports.

If you are only looking for a small mortgage your husband may qualify for same depending on his income only.

Shadow2019

Lenders see back on the last 2 years of payment history. Once a loan is closed then 5 years starts where they will be able to view.If you are repaying monthly you can use this time to get your rating back on track and they will see you are able to commit to monthly payments. I paid everything in full which while it closed the debt my two year history will show the arrears I had until the 5 years are up. If I knew now about the previous 2 years I would have set up a payment plan and showed my ability to pay monthly for that period of time rather than clearing down. Bad credit can happen to good people but if you take the steps to rectify this will pass. Best of luck!

MCBrowne

I have a similar situation. Hoping to apply for a mortgage with my partner. We have been saving for the best few years. I had a small loan in 2015 and failed to make payments for various reason (stupidity) but cleared the debt fully with the original lender in 2017. When will this be cleared from my credit report? Or is there no chance of a mortgage?

MCBrowne

I have a similar situation. Hoping to apply for a mortgage with my partner. We have been saving for the best few years. I had a small loan in 2015 and failed to make payments for various reason (stupidity) but cleared the debt fully with the original lender in 2017. When will this be cleared from my credit report? Or is there no chance of a mortgage?

Gally79

Clear off all your debts, once cleared off make sure you get confirmation in writing, that your debt has been cleared. From now on for the next 24 months start saving on a regular basis, whatever you can afford. Once you have all debt cleared and a history of regular savings, for at least 12 - 18 months, you could start reaching out to banks and/or brokers asking them to have a look at your situation again. Just clear all your debt as soon as possible (without taking on other/new loans).

MCBrowne

Gally79 wrote: »

Clear off all your debts, once cleared off make sure you get confirmation in writing, that your debt has been cleared. From now on for the next 24 months start saving on a regular basis, whatever you can afford. Once you have all debt cleared and a history of regular savings, for at least 12 - 18 months, you could start reaching out to banks and/or brokers asking them to have a look at your situation again. Just clear all your debt as soon as possible (without taking on other/new loans).

Thank you for this. The loan was completely cleared in 2017. We have been saving religiously now for about two years. Meeting with a mortgage broker next week and will go from. Hopefully it doesn't negatively impact us too much!

Gally79

MCBrowne wrote: »

Thank you for this. The loan was completely cleared in 2017. We have been saving religiously now for about two years. Meeting with a mortgage broker next week and will go from. Hopefully it doesn't negatively impact us too much!

Great so, seems you have significantly improved your situation. As long as the positives outweigh the negatives, there's hope. Best of lock and keep us updated.

MCBrowne

Gally79 wrote: »

Great so, seems you have significantly improved your situation. As long as the positives outweigh the negatives, there's hope. Best of lock and keep us updated.

I've requested my credit report just so I have the facts. Meeting a mortgage broker next week. Except for this blemish we have a site in our own names, a good amount saved and both have very secure jobs. Thankfully neither of us were negatively impacted by Covid. The amount we need is also under 3.5 times our combined salaries.

Madamhindsight

MCBrowne wrote: »

I've requested my credit report just so I have the facts. Meeting a mortgage broker next week. Except for this blemish we have a site in our own names, a good amount saved and both have very secure jobs. Thankfully neither of us were negatively impacted by Covid. The amount we need is also under 3.5 times our combined salaries.

How did you get on? Did you apply for a mortgage. Similar circumstance

MCBrowne

Madamhindsight wrote: »

How did you get on? Did you apply for a mortgage. Similar circumstance

Hi, we got AIP from AIB and EBS and are currently waiting on our legal work from AIB. When we met with the banks, I explained the situation to them and it wasn't a problem. EbS did make a few phone calls asking the reason after I told them but that was it. Hope it works out for you.

bleaks

That's good to hear. I'm in a similar situation, however, I was offered a settlement for the credit card debt of slightly less (300) than what was owed back in 2016. I paid and presumed this would not affect me negatively, but the balance still appears on my ICB credit report even though I was under the impression the debt was cleared.
I'm going to be applying for mortgages soon and dreading this will impact my chances, eep.

MCBrowne

bleaks wrote: »

That's good to hear. I'm in a similar situation, however, I was offered a settlement for the credit card debt of slightly less (300) than what was owed back in 2016. I paid and presumed this would not affect me negatively, but the balance still appears on my ICB credit report even though I was under the impression the debt was cleared.
I'm going to be applying for mortgages soon and dreading this will impact my chances, eep.

I thought it was a waste of time applying but thankfully I was wrong. Hopefully will work out for you!

Lou1258

Looking for advise please. I have bad credit from a credit union loan - missed repayments. The Loan has now been paid in full for 2 years. Have no other debts and my husband has a clean slate.
Applied for a mortgage with the credit union and was approved in full. We have €23k deposit plus €26k help to buy. The mortgage amount is €241k.
Credit union have now said they can’t do an valuation on a house that’s not built as it’s a new estate and won’t progress any more until the house is ready. We need to sign the contracts so we can pay the deposit/HTB. Now applied to BOI I’m so worried, is there any chance? Our circumstances have completely changed. We have regular savings and both working and not affected by covid. When I spoke to the bank I told them about the credit rating and they said it should be fine but I have a gut feeling

Jim2007

Lou1258 wrote: »

The mortgage amount is €241k. Credit union have now said they can’t do an valuation on a house that’s not built as it’s a new estate and won’t progress any more until the house is ready. We need to sign the contracts so we can pay the deposit/HTB.

How does this have anything to do with your credit rating??? Are we missing something in your post?

Lou1258

Jim2007 wrote: »

How does this have anything to do with your credit rating??? Are we missing something in your post?

As we are now applying with BOI, the credit union were aware of the missed payments as the loan was with them. Have to now have another underwriter look at my credit score..

Lou1258

Lou1258 wrote: »

As we are now applying with BOI, the credit union were aware of the missed payments as the loan was with them. Have to now have another underwriter look at my credit score..

Missing a few payments but eventually catching up and having cleared the loan is not the worst in the world. If everything else fine you should be okay, imo.



Bear in mind the bank needs to lend to survive, they don't do it as a Benevolent favour, and anyone not in COVID affected employment is looking mighty attractive right now. Good luck.

Jim2007

Lou1258 wrote: »

As we are now applying with BOI, the credit union were aware of the missed payments as the loan was with them. Have to now have another underwriter look at my credit score..

Well before you put too much effort in, perhaps try and ask them if they are going to treat it any different to the CU.

In any case I expect you will need to pay the 49k you have available to you as the deposit.

jimmycrackcorm

Lou1258 wrote: »

Looking for advise please. I have bad credit from a credit union loan - missed repayments. The Loan has now been paid in full for 2 years. Have no other debts and my husband has a clean slate.
Applied for a mortgage with the credit union and was approved in full. We have €23k deposit plus €26k help to buy. The mortgage amount is €241k.
Credit union have now said they can’t do an valuation on a house that’s not built as it’s a new estate and won’t progress any more until the house is ready. We need to sign the contracts so we can pay the deposit/HTB. Now applied to BOI I’m so worried, is there any chance? Our circumstances have completely changed. We have regular savings and both working and not affected by covid. When I spoke to the bank I told them about the credit rating and they said it should be fine but I have a gut feeling

I don't quite understand. What is stopping you from paying the deposit when you are mortgage approved? You don't have to do the drawdown until the housse is ready and get a valuation then.

Your credit rating will be fine as you've cleared your loans and have a more recent good record and shown ability to pay. The fact that the credit union is willing to give you a mortgage despite your own history with them.

Lou1258

jimmycrackcorm wrote: »

I don't quite understand. What is stopping you from paying the deposit when you are mortgage approved? You don't have to do the drawdown until the housse is ready and get a valuation then.

Your credit rating will be fine as you've cleared your loans and have a more recent good record and shown ability to pay. The fact that the credit union is willing to give you a mortgage despite your own history with them.

I don’t either? The credit union said they won’t do an valuation on a house that isn’t build and won’t carry on until the house is built?? I have a call with the BOI tomorrow. We bank with them so they have all our statements etc and I have DD each week to the credit union for saving and and we are paying rent so fingers crossed!!

Jim2007

Lou1258 wrote: »

I don’t either? The credit union said they won’t do an valuation on a house that isn’t build and won’t carry on until the house is built?? I have a call with the BOI tomorrow. We bank with them so they have all our statements etc and I have DD each week to the credit union for saving and and we are paying rent so fingers crossed!!

From your original post, I understood that that CU had given you approval in principle and it was a case a waiting for the building to be in a state that a valuation could be completed. It now seems it was basically a rejection???

It is understandable that any valuation in the circumstances would be very subjective and cause many underwriters to pass on it.

Darc19

I'd check with a broker. Credit union is probably charging near 5%. You'll get circa 2.5% through a bank.

On a €250,000 mortgage that's over €500 difference a month EVERY month.

Jim2007

Darc19 wrote: »

I'd check with a broker. Credit union is probably charging near 5%. You'll get circa 2.5% through a bank.

On a €250,000 mortgage that's over €500 difference a month EVERY month.

I fear the problem is a bit more basic than that. The OP needs to find a lender with an underwriter who is willing to accept a very subjective valuation within the timeline needed to sign the contract....

Fearofgod

How long are people currently in waiting for ccr report

xElDeeX

Fearofgod wrote: »

How long are people currently in waiting for ccr report

Took about a week for me.

Fearofgod

xElDeeX wrote: »

Took about a week for me.

I got my CCR-nothing extra on it , an old CU loan that should have been on it, due to come in NOv 2021-this year, isnt on it.
An old PTSB is on it, i know about this, only paid off 2 years ago but an Old BOI from 2000 is not on it. Thank god.
Its took 36 hours for CCR report.
I am very happy, ashamed to be running form an old debt, but if anyone can let me know if the CCR was missing info.
THE CU loan, was paid off 2015, so by the time it came for the CU to report to the CCR, would it be missing due to the fact its paid and settled?