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**MrsD** · 16 April 2015, 18:21

Re: Mortgage and outstanding debt

welcome to AAD

the defaults will stay on your file for 6 years regardless of what you do
as long as you actually did default, they have probably reported it to the cras so it will be sitting on there

I would personally hold back from the mortgage until you are back on your feet and got a bit of financial oompf behind you, the help to buy isn't that great a help and you have no idea what is going to happen to interest rates, offers, governments in the future. So personally if the debts aren't bothering you, leave them and don't pay them. Statute barring in Scotland is 5 years after the last payment or acknowledgement in writing, so if you start making payments or offers, you restart the clock.

Just concentrate on getting your degree, then getting a job (which isn't as easy as it appears in Scotland). Just keep an eye on the debts and if anyone gets heavy in writing, come back to us and we'll help you sort it. DMPs and DAS and trust deeds are all the work of the devil, so stay well clear.

**PlanB** · 16 April 2015, 18:47

Re: Mortgage and outstanding debt

Originally posted by Aitch View Post

So the last applications for the Right To Buy scheme up herein Scotland are on 31^st July 2016 and I hopefully will be looking to apply aroundthat time so I’m trying to get my debts sorted out now in the event I have a chanceof getting a mortgage.
Mortgage wise I have no idea yet of how much I may belooking for but I will be entitled to the full 70% discount so probably around the£20,000 mark.

Hello Aitch and

to AAD.

If I've understood your post correctly you are hoping to apply under the Right to Buy Scheme not the Help to Buy Scheme. This means you are possibly in social housing (council or housing association?).

There are several mortgage lenders operating in this area and they each have different criteria. I'm aware that in the rest of the UK the banks have a more lenient approach to borrowers in social housing because they can see that they are buying a property with substantial equity built in from Day 1. After all £20k is a very small mortgage and possibly even cheaper than renting to service.

Are you able to tell us what caused your debt problems in the first place because sometimes a lender will be more tolerant if they know the reason for the blip.

If you are graduating this summer you may have the opportunity to hold down a good job for a full year before you apply for the Right to Buy mortgage. Do you feel your chosen line of work has good prospects of full employment after you graduate? (Golly I'm beginning to sound like my father!). I'm guessing from your profile that you may have had a previous job/career before becoming a student.

What I'm trying to say is don't give up on your dream of becoming a homeowner yet.

Plan B x

**Aitch** · 16 April 2015, 19:11

Re: Mortgage and outstanding debt

Hi there, thanks both for replying so quickly,

My fault sorry that I never explained properly. Yes it's the right to buy a council house as I've been a tenant for 19 years rather than the help to buy. The government have decided to do away with it and the law's been passed already so July 2016 is the final date for applications. I had hoped or rather dreamed of being able to do it in the future when things were a bit more stable but this is why the rush.
Also I think the mortgage broker I spoke to meant that regardless of the 6 year thing as long as they were over 3 years old and 'satisfied' that would be okay. I was hoping this is correct as I would rather give it a try than always wonder.

It's interesting that the Statute barring is 5 years from last payment, so does this really mean the last payment rather than the default date? Sorry for my ignorance, it's just for most of them the last payment was many months if not a year before the default dates. I would need to do a bit of digging to get all the right dates though.

Yes the reason I got in a pickle with PDLs was trying to make ends meet over the summer a couple of years ago when I only had a part time wage and no student loan. As I said the overdraft was the PDLs taking the payments regardless of having no balance; the credit cards, well just being a student; and the mobile phone was when I moved homes, BT messed me about for months trying to get a line in and as a result I was making all my calls from a mobile, ran up a huge bill that I couldn't pay and for good measure they doubled it when they terminated the contract.

So I guess I really need to know what the correct plan of action is to take to try and sort this out with the intention of applying in a year's time.

Speaking of digging, it's archaeology I'm studying so I hope to be doing some soon!! and there does appear to be good employment rates among the graduates so fingers crossed and thanks again

Hx

**PlanB** · 16 April 2015, 22:13

Re: Mortgage and outstanding debt

Originally posted by Aitch View Post

it's the right to buy a council house as I've been a tenant for 19 years rather than the help to buy.

. . . . the reason I got in a pickle with PDLs was trying to make ends meet over the summer a couple of years ago when I only had a part time wage . . .

A little more information surrounding your historical situation may be useful to help us to guide you as to how to make a plan now for an application in July 2016.

If you have been a council Tenant for 19 years does this mean you were the original Tenant or have you acquired the Right to Buy through succession rights?

Forgive me for prying but you say you are a student so I'm guessing you may be a mature student or am I being ageist?

I note you say you had a part time job in the past which suggests you may have previously submitted either self-assessment tax returns or have a record of earnings with HMRC.

These are the little things which could help you get a mortgage in future.

Plan B x

**Aitch** · 17 April 2015, 06:59

Re: Mortgage and outstanding debt

Yes, I am a sole original tenant and the first 16 of those were at a different address until I moved to where I am now. However because I had to move at the GHA's request, as they wanted to knock down the building, I still retain all my rights to buy under the 'old' scheme.
Lol, no your not being ageist

I am err older shall we say. I have worked more or less continuously for the past 25 years mainly in a retail or customer services environment. Up until about a year ago I was in the same employment for 9 years as a CCTV Operator which I left because I needed to spend the summer getting some archaeological experience, luckily it was paid. When I came back I got a part time supermarket job which I've been in since November.
I didn't realise these things could help, and yes there will be HMRC records for most of this time. I say most because there were a few breaks, however I have a now grown up daughter who I was looking after as well so about 3 time I didn't work for a year or two..
Hx

**PlanB** · 17 April 2015, 07:58

Re: Mortgage and outstanding debt

Originally posted by Aitch View Post

I have debts totalling around£4300 which consists of:-
6 payday loans, of which 5 are with DCAs
2 credit cards, both are with DCAs
1 unauthorised overdraft with a bank (which was caused bythe PDLs)
and 1 with a DCA for a mobile phone contract.

Were any of your PDLs with Wonga because recently they have been writing-off some loans or refunding interest following sanctions by the FCA for their poor business practices? If there's been massive interest and charges added to these loans then you may be able to recover some of that to reduce the balances. We have a really good PDL expert on this site so I'll flag this up for their attention.

I think the best way forward is for you to turn this thread into a Diary with a separate post for each of your debts so we can tackle them individually. If the credit cards were opened before April 2007 they have the potential to be unenforceable which we'll discover once we have your information.

Read this thread first http://forums.all-about-debt.co.uk/s...ewfull=1#post3

and then make a post for each debt using this format:

Type of account (credit card/loan)

Date commenced (ideally before April 2007)

Approx balance

Date last paid (approximate date you last made a FULL payment)

Are you on arrangement or not paying

Status (default/in arrears/up-to-date)

Account owner (who is writing to you, a DCA or the lender)

**PlanB** · 21 April 2015, 08:50

Re: Mortgage and outstanding debt

Originally posted by Aitch View Post

I still retain all my rights to buy under the 'old' scheme.

. . . I have worked more or less continuously for the past 25 years mainly in a retail or customer services environment. Up until about a year ago I was in the same employment for 9 years as a CCTV Operator which I left because I needed to spend the summer getting some archaeological experience, luckily it was paid. When I came back I got a part time supermarket job which I've been in since November.

Your previous employment record will help you to get a mortgage.

There are lenders (such as G E Money) who will provide mortgages to a first time buyer (i.e. someone with no previous mortgage repayment history) who has no new Defaults received in the last 12 months. Your Defaults were added in 2012/13 so will be 3/4 years old by the time you apply for a mortgage in 2016. This is their current lending Guide:

http://www.gemoney.co.uk/en/docs/NEW...duct_Guide.pdf

G E Money used to discriminate against borrowers who had PDLs even if they were paid, but only if the PDL was taken out in the previous 3 months or PDLs which remained unpaid:

http://www.theguardian.com/money/201...s-payday-loans

Not all lenders will provide mortgages for Right to Buy purchases but if you check back nearer the time I'll see what I can find for you. The lending criteria changes with the weather in the mortgage market. Products can get withdrawn at 24 hours notice if the financial markets get spooked by some breaking news.

Useful tip: if you want to see which lenders will offer mortgages to borrowers with adverse credit (and the limitations such as how many Defaults in what period of time) then always check their Intermediaries' website which is exclusively for the brokers and packagers who sell their products, but these websites are also accessible on Google like the G E Money link I posted above.

Plan B x

**PlanB** · 21 April 2015, 11:45

Re: Mortgage and outstanding debt

Originally posted by Aitch View Post

All have defaults against them registered between October2012 and Sept 2013. Advice I’ve been given is that as long as the defaults areover 3 years old and have been satisfied, either partially or fully, I shouldbe in with a chance of a mortgage albeit with a lender who accepts bad credit applications. However as I said the last Right to Buy applications are July 2016and one default will not reach the 3 years until the September.

. . . The thing is if trying to get this mortgage would be futilebecause of the defaults should I even bother trying and just leave them to run their 6 years?

I've had another look at the Right to Buy cut-off point and it's clear that as long as your application is made by 31st July 2016 you'll be fine. You don't have to complete the purchase by that deadline.

http://www.adviceguide.org.uk/scotla...e_scotland.htm

So if all your Defaults will be over three years old by then (you say the last one will be in September 2016) you will have cleared that hurdle if you apply for a mortgage in September 2016. Your mortgage broker was right.

So you now have 1 year 5 months to clean up your credit file.

I've alerted our PDL expert to your five loans and as soon as you post up those details they will take a look at what can be done to get the outstanding balances written down or written off if there has been any unfair overcharging.

If that works it could free up some money for you to deal with the two credit cards and the overdraft. Are any of them still charging interest and/or adding fees?

Plan B x

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