KELLY Richardson almost gave up on her dream of becoming a homeowner after being told it was virtually impossible to get a mortgage.
The 38-year-old mother of two had missed out on a £706 water bill after moving home, which had caused her credit score to drop.
The medical assistant didn’t realize she had an outstanding payment as she moved from one rental property to another — and it almost wiped out her chances of getting a mortgage.
The missing invoice kept coming back to her old address which means she hasn’t received any recent reminder letters.
It also resulted in Kelly receiving a County Court Judgment (CCJ).
When a company or individual is owed money and cannot repay the debt, they can ask the courts to take legal action.
If they sent the CCJ to the wrong address it would have been your responsibility to update the companies with your new details when you moved home so it is still valid.
A CCJ negatively affects your credit score, which usually reduces your chances of borrowing money.
If you pay off a CCJ in full within a month, it will be completely removed from your file.
If you pay it back after the first month, the CCJ will remain on your file but will show that you have paid it.
It is possible to agree on partial debt or payment in installments.
However, if you don’t pay it all back, the CCJ will remain on your file for six years.
Kelly was able to track down the debt collectors to take care of the missing payment and is now paying it off in monthly installments.
However, this meant lenders were wary of lending the family money to buy their home.
Specialist mortgage lender Together eventually helped them strike a deal.
Kelly has borrowed £126,000 at a fixed rate of 6.69% for five years.
Rates are typically higher than a standard mortgage to reflect the additional risk a lender takes when extending a loan to a borrower with a poor financial track record.
Kelly and her 12-year-old Kaydon and Jackapoo pup Frankie finally moved into their £170,000 two-bedroom flat in Hampshire in October.
We sat down with Kelly to talk about how she overcame these challenges to become a homeowner for The Sun’s My First Home series.
tell me about your home
It is a two bedroom flat on Hayling Island in Hampshire.
I have a separate kitchen and living room with space for a desk to work from home.
There are two decent sized bedrooms and a bathroom.
My apartment is in front of the sea and I have a balcony where I can enjoy a wonderful view of the sea.
How did you decide on the location?
I grew up in London but have lived on Hayling Island since 2014 and didn’t want to move back to the city.
My son Kaydon goes to school here so it was important to me that we stayed in the area.
My parents also live across the street and I didn’t want to be far from them.
How much did it cost?
My flat cost £170,000 and I paid a 25% deposit of £44,000.
I have a £126,000 31 year mortgage with a five year fixed rate of 6.69%.
I got my mortgage through Together, a specialist in mortgages and secured loans.
My repayments are £813 a month – that’s around £200 cheaper than the rent I was paying before I moved into the property.
How did you save for this?
Last December I decided I was fed up with renting and wanted Kaydon and myself to have our own place to live.
My daughter Megan, 18, had also moved out of the house.
I decided that the best way to save was to take on extra work.
During the summer I took on an extra job providing medical support at events such as festivals, sporting events and competitions.
Besides my normal nine-to-five job, I would do at least two events a week.
Although it was exhausting, I was able to bring in around an extra £1,200 a month which went straight into my savings.
I also decided to find free activities for Kaydon and I to save money.
For example, instead of spending around £30 to go to the cinema, we would instead go paddling or kayaking on the beach for free.
This saved me about €100 a month.
I’ve always been an impulse shopper, and I knew that in order to save up for the down payment, I needed to get the hang of it.
To resist the temptation to sit and scroll through shopping apps in the evenings, especially when Kaydon wasn’t home, I tried to find different ways to entertain myself.
Instead, I would walk the dog or put on a movie and make sure my phone was out of my reach.
This kept me from ordering unnecessary things like Lego for Kaydon or a new handbag for myself.
I also organized the home screen on my iPhone and put all my shopping apps in one folder.
I then made sure the folder didn’t appear on my main home screen and stopped myself from clicking on it out of habit.
I saved about £200 by eliminating unnecessary expenses.
My dad also gave me a cash gift of £9,000 for my deposit.
I was very lucky to get this help and I know not everyone is so lucky.
How did you overcome your bad credit history?
Unfortunately, in February I was told by my mortgage advisor that I had a CCJ on my file due to an unpaid water bill.
I found out I owed £706 including a collection fee.
This was such a shock when I found out because I had never been contacted about it.
I had moved to a new rental property and contacted all my suppliers to notify them of my change of address and have the final invoices sent to my new address.
I paid off my gas and electricity but in the chaos of the move I didn’t realize I hadn’t heard from the water company.
I was not aware that a final payment was missing and all letters and reminders were sent to my old address.
It was really devastating to find out as it completely destroyed my credit rating.
I was later told that this would severely affect my ability to get a mortgage.
I contacted the water company who referred me to the collection agencies who took care of the outstanding payment.
I am now paying off the debt in monthly installments of around £77.
My mortgage advisor helped me find a lender who would offer me a mortgage despite CCJ.
It helped that I had no other outstanding debts either.
How did you afford to set it up?
I bought things in stages to spread the cost.
I was fortunate that most of the furniture from my rental was in good enough condition to easily move to my new home.
That meant I didn’t have to spend hundreds to outfit my new apartment.
What advice would you give to other first-time buyers?
As scary as it seems, just do it. I really think if I can do it, anyone can.
Get a good mortgage advisor – they will be of great help and will guide you through every step.
They will explain anything you don’t understand and it makes the process a lot easier than doing everything on your own.
Meanwhile, we reveal how one family used the snowball method to pay off £26,000 in debt and buy their first home.
A savvy saver managed to set aside half his wages while still renting to buy his first home.
https://www.thesun.ie/money/9941618/irst-time-buyer-credit-score-debt/ I’m buying for the first time – how I got my £170,000 two-bedroom flat despite terrible credit scores due to an unpaid bill