"Our poor credit score could have stopped us getting on the property ladder"
Samantha Hodge, 24, is an Educational Support Worker who lives with her boyfriend Sam Wright, 28, also an Educational Support Worker. They have just bought their first home together in North Prospect, Plymouth having previously been advised that, due to their poor credit score, it would be unlikely that they would be offered a mortgage...
Samantha and Sam have been together for two years, having met at work four years ago. They decided to buy a home together in October 2016 as they didn't want to continue renting and thought that the amount they were paying each month would be better invested in their own property , but as they both had debts outstanding on credit cards, as well as personal loans, when they initially investigated the possibility of getting a mortgage they were told that it probably wouldn't be possible, due to their credit rating.
As Samantha explains, “We felt that we were caught between a rock and a hard place. We thought that we would have to save up a substantial deposit to be able to buy somewhere, but then if we were saving for a deposit we wouldn't be able to clear off our debts. And if we'd not paid down our debts, then this would impact our credit score so we wouldn't be able to apply for a mortgage. We were just going around in circles and all the time, paying hundreds of pounds a month in rent.”
The couple were recommended to Mortgage Advice Bureau to see if there were any alternatives to their situation, and fortunately, having reviewed their finances, their Adviser was able to suggest a specific Help To Buy mortgage and provide them with the guidance they needed in order to take their first steps on the property ladder. Because the mortgage that their adviser found them didn't require them to save for a big deposit, Samantha and Sam were able to use some of the money they had saved to clear off some of their debts, meaning that their credit score improved enough for them to be considered for a mortgage, which they successfully applied for.
Talking about their previous experience, Samantha says, “We felt so relieved that we were able to pay off our debts and buy a house. Before then, we thought that we couldn't do both and that we'd spend years renting, which would have been such a waste of money. Before we spoke to Mortgage Advice Bureau, we'd been told that, without paying off the debt, it would have been impossible to get a mortgage, but we couldn't see how we could do that and save the money we needed for a deposit. No one had explained that we could reorganise our finances so that we could pay down our debts, yet apply for a mortgage which didn't need such a large deposit. We're in a much better financial position now, because we've cleared our credit cards and have bought a house. Hopefully, our property will increase in value over the years, so although we now have a mortgage it's 'good debt', rather than the 'bad debt' we had sat on credit cards. We were so pleased that we were able to sit down with someone who's explained and educated us about our finances, it‟s literally changed our position for the better.”
Samantha continues, “This whole process has been a real eye opener. We've been shocked that we've actually been able to buy our first home. But now we understand how important a good credit score is, it's something that we will definitely keep an eye on in the future, so that we're in the right place financially when we outgrow this property and want to move up the property ladder to a bigger place .”
If you need help getting yourself mortgage ready, read our top tips here.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.