Credit card debt affecting credit rating for mortgage application

S

Sanparom

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I have had a few loans. The most recent being a Credit Union loan, of which I was repaying €300 fortnightly. This loan has now been cleared.

I have no other loans at the moment except a stupid €1000 balance on a credit card. I'm in arrears on this because (albeit incredibly stupidly, I know - you don't need to tell me!) I kept forgetting to pay and then they stopped sending me bills. I have missed a lot of payments and I'm disgusted with myself. It is a small balance but because I've missed so many payments I know that this will drastically impact my credit rating. I'm going to order my credit report from the ICB today, but I know it won't be good.

I'm just looking for a bit of advice really. I'm paying 500 on to the credit card on Tuesday and will clear the rest of the balance over theb next few weeks.

Is there any chance at all that a bank would consider us for a mortgage (my husband has no loans at present) or will we have to wait 5 years? I'm so worried because I'm nearly 40 and afraid there will be no chance of getting a mortgage when I'll be 45. Will banks negotiate at all in this kind of situation.

I'm furious with myself because it's a tiny amount really and I had been paying huge amounts every fortnight to the CU, so I can repay.

We have roughly €50,000 savings and are looking to sell our house which would hopefully give us about another €30,000.

I'm just looking for honest advice. I'm aware I've been incredibly stupid.
 
If you have €50k in savings, then pay off your credit card balance immediately.

You will not get a loan from a mainstream lender. But you might get a loan from Pepper which is a sub-prime or near-prime lender.


Brendan
 
Thanks Brendan, sorry yes, I meant to clarify that I will be paying the rest off in the next couple of weeks. I just don't have access to the other 500 or the savings immediately.

Would a sub-prime lender loan to us now? Would there be any chance of us getting a mortgage from a mainstream lender before the 5 years are up and if not, what are our chances of getting a mortgage at 45 years old?

I'm a bit worried about interest rates with a sub-prime lender.
 
Brendan Burgess said:
If you have €50k in savings, then pay off your credit card balance immediately.

You will not get a loan from a mainstream lender. But you might get a loan from Pepper which is a sub-prime or near-prime lender.


Brendan
Click to expand...


Pepper aren't that generous Brendan. The best they will do is let 2 missed payments on unsecured debt up to €750 may be considered. From the sounds of the OP, there was a lot more than 2 missed payments.

Banks are out the door with mortgage applications. At the moment, they don't need to give loans to applications with less than perfect credit ratings.

Do as Brendan says, pay the remainder of the loan off in full immediately. Continue saving every month to show the bank you are living well below you means. You may not be good for a mortgage right now but there is certainly space for sub prime lenders in Ireland again and one may come into the market in the next year or so.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
So I might have a chance in a couple of years? That's ok. I could cope with that. We have 2 kids in a tiny house, so really need to get out of here. I'm just so sick with stress that I have done this over such a small amount of money.
 
There may be a chance. You need to clear your debt first. No point in having €50,000 on deposit when you have a €1,000 that can stop you getting a mortgage in the future.


Steven
http://Www.bluewaterfp.ie (Www.bluewaterfp.ie)
 
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