Following my recent revelation about the goal of buying our dream home, I wanted to address a side topic I think may be of use to other people.
There is a perception poor credit can impact your chances of getting accepted for a mortgage loan. I want to discuss this in more detail below.
We were definitely in the category of a family who had a slightly reduced income, and over a prolonged period of time, and this led to financial difficulty. Shame is the main feeling I had when we were struggling to make ends meet each month.
Disclaimer – I am not a financial adviser. Please do not use this post as a substitute for financial advice.
Information for anyone impacted
Experian provides practical tips about how to show you are able to maintain payments, even if you have bad credit. They also include useful information and links to other organisations offering help.
Show lenders you’re a responsible borrower by meeting all your regular payments – e.g. utility bills and credit card payments – on time and in full.
Review your spending – try to reduce costs where you can, and keep your monthly outgoings consistent. Aim to have money left over at the end of each month.
Try to review your credit report regularly – make sure it’s up to date, and that the information on it is accurate. If you do find anything that needs correcting, contact the relevant lender and ask for an amendment – or get in touch with Experian, and we’ll speak to the lender for you.
If you have a good explanation for past financial difficulties, such as redundancy or ill health, consider adding a note of correction to your report for lenders to see.
Only set your sights on a property you can realistically afford, as there aren’t too many mortgages around at 95-100% loan to value.
You may need a guarantor, typically a parent or an older relative, to reassure lenders that monthly payments will be covered if you can’t keep up with them.
You can check your eligibility for a mortgage with Experian. Whether you’re a first-time buyer, moving house or looking to re-mortgage, we can show you which lenders are more likely to accept you.
Remember, you’ll also need a decent deposit in place – at least 10-20% of the property price.
Source – Experian
Our financial situation and the difficulties we faced
With the global pandemic, many families found themselves struggling financially through no fault of their own. We were definitely in the category of a family who had a slightly reduced income, and over a prolonged period of time, and this led to financial difficulty. Shame is the main feeling I had when we were struggling to make ends meet each month.
Financial planning was previously a passion of mine. I was great at managing finances. Therefore, money worries hit me hard. Especially as this happened during recovery from a mental breakdown and when I was facing redundancy from my job. Everything that could go wrong did.
This experience taught me life doesn’t always happen according to the plans you have in your head, or the ideal vision of how you think something will pan out. You might have to face an incredibly bumpy ride before you achieve your dream.
For us, it’s almost like the rollercoaster is just about to stop. We need to recover, regroup, do some financial planning, and then make our next move in life. Because we are just on the cusp of making some future financial decisions, it is an exciting time for us.
House goals
I’ve talked in my recent post about house goals. I currently enjoy searching Pinterest for home decor projects, how I want my garden to look, and whether I can reasonably afford the items on my home wishlist.
Speaking about house goals, check out these houses for sale in Toronto. When we first got together, the hubby and I talked about relocating to a big city. We loved the hustle and bustle. We also wondered about moving abroad and asked ourselves whether it would be an easier life. I think its human nature to believe the grass is greener somewhere else. For the foreseeable future, we are hoping to buy a house in the UK, but who knows what the future holds.
Summary
I wanted to write this post today to assure people, having bad credit doesn’t mean you cannot proceed with obtaining your financial goals and live out your home buying dreams. It’s healthy to have a goal in mind and to look at homes, in order to manifest it in real life.
Final thoughts
I hope you enjoyed reading about my goals and the roadblock along our home buying journey.
Let me know your thoughts in the comments below.
