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  • FIRST POST
    • brendon22uk
    • By brendon22uk 19th Mar 17, 3:41 PM
    • 11Posts
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    brendon22uk
    Default and applying for mortgage next summer
    • #1
    • 19th Mar 17, 3:41 PM
    Default and applying for mortgage next summer 19th Mar 17 at 3:41 PM
    Hi all,

    I believe this is my first post on these forums and i have been looking around MSE for a while now to try and help improve my credit file as i am looking to apply for a mortgage next summer 2018.

    My only concern and the thing i believe may affect my chances of obtaining a mortgage are the 3 defaults i have on file, these are:

    1. elevate credit ltd (payday) - date of default: 27/12/2013 - balance £71
    2. lending stream - date of default: 16/04/2014 - balance £835
    3. barclaycard - date of default: 27/07/2012 - balance £0

    When I apply for the mortgage in summer 2018 i would hold a clean 4 year history with no missed payments or defaults etc.

    I have paid the £71 owing to the payday lender just last week and looking for some advise whether to pay off the £835 which i havent contacted to make payment and whether best to ignore? since it will be more the 4 years when i apply for mortgage.

    Just looking for some advise of what you guys think i should do and should not do to help with my mortgage application.

    1. My ideal thinking is send a complaint to the payday lender about a default applied for something i borrowed for £120 to get rid of one default (£71).
    2. The next is to clear the £835 very soon so when applying for a mortgage it would show this was paid more then 12 months ago.
    3. and the barclaycard..... well it should drop of when applying come august/september 2018.

    what are your thoughts and what would you do?

    many thanks for your help.
Page 1
    • csgohan4
    • By csgohan4 19th Mar 17, 4:03 PM
    • 3,567 Posts
    • 2,239 Thanks
    csgohan4
    • #2
    • 19th Mar 17, 4:03 PM
    • #2
    • 19th Mar 17, 4:03 PM
    you will need a good broker who deals in adverse credit and not one who get for free i.e L+C


    They will better match you to a lender with your credit history
    Last edited by csgohan4; 19-03-2017 at 4:13 PM.
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • ACG
    • By ACG 19th Mar 17, 4:04 PM
    • 15,070 Posts
    • 7,615 Thanks
    ACG
    • #3
    • 19th Mar 17, 4:04 PM
    • #3
    • 19th Mar 17, 4:04 PM
    If you satisfy the defaults/get them removed your chances of getting a high street rate would increase.

    If you do not satisfy them, then I think you would likely be looking at higher than normal rates.

    Deposit wise (as a percentage) how much do you expect to have?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • brendon22uk
    • By brendon22uk 19th Mar 17, 4:52 PM
    • 11 Posts
    • 0 Thanks
    brendon22uk
    • #4
    • 19th Mar 17, 4:52 PM
    • #4
    • 19th Mar 17, 4:52 PM
    Many thanks for your quick replies.

    Just wondering what you mean L+C?

    I live in the north east so the property values are reasonably low and we're looking to get a help to buy scheme. We will have about £5k-8k deposit and looking for a 80k-120k property.

    If we can try and get a 10% deposit hopefully money terms that will be ok.

    So you believe its best to pay the £835 in order to satisfy the default? then to ignore it and will make my chances much slimmer? Even though the default would be over 4 years old when applying for mortgage.
    • ACG
    • By ACG 19th Mar 17, 5:02 PM
    • 15,070 Posts
    • 7,615 Thanks
    ACG
    • #5
    • 19th Mar 17, 5:02 PM
    • #5
    • 19th Mar 17, 5:02 PM
    Clearing the defaults shows that although you went in to arrears, you have done the right thing and cleared them.

    I think you will need a 10% deposit minimum. Anything less than that and I think your chances are pretty slim, unless you want to pay rates of around 4.5%.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • brendon22uk
    • By brendon22uk 19th Mar 17, 5:33 PM
    • 11 Posts
    • 0 Thanks
    brendon22uk
    • #6
    • 19th Mar 17, 5:33 PM
    • #6
    • 19th Mar 17, 5:33 PM
    I think i will do just that ACG and pay the £835 next month - better to pay the debt recovery company or directly? or doesnt matter?

    Also, im guessing having adverse credit for more the 4 years ago when applying for mortgage in summer 2018 isnt really going to make my chances better?

    Just wish i paid more attention to making my payments back then, really kicking myself lol.

    Hopefully the payday lender will accept my complaint and remove the default due to being such a small amount borrowed.
    • ACG
    • By ACG 19th Mar 17, 6:07 PM
    • 15,070 Posts
    • 7,615 Thanks
    ACG
    • #7
    • 19th Mar 17, 6:07 PM
    • #7
    • 19th Mar 17, 6:07 PM
    The age will help, but so will clearing the default.
    Im not sure who you need to clear it with, speak to them both and see what they say, presumably it will be the debt collection agenct.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Sahmed660
    • By Sahmed660 19th Mar 17, 6:12 PM
    • 44 Posts
    • 4 Thanks
    Sahmed660
    • #8
    • 19th Mar 17, 6:12 PM
    • #8
    • 19th Mar 17, 6:12 PM
    If you don't clear the default there is every change they could take it further and you'd have a CCJ on your file as well.
    • jessnat995
    • By jessnat995 19th Mar 17, 9:07 PM
    • 105 Posts
    • 20 Thanks
    jessnat995
    • #9
    • 19th Mar 17, 9:07 PM
    • #9
    • 19th Mar 17, 9:07 PM
    as mentioned getting a mortgage with defaults isnt as hard as imagined,

    just pay slightly higher rates, have to way up the odds
    • ndf9876
    • By ndf9876 21st Mar 17, 1:11 PM
    • 84 Posts
    • 38 Thanks
    ndf9876
    @brendon22uk - my personal advice to you would be that, if you felt the payday loans were not affordable, you formally complain about them to the lenders, and ask for the defaults to be removed.

    The Financial Ombudsman Service are dealing with many of these kinds of complaints.

    I would suggest researching payday loan affordability complaints, seeing if this might apply to you and going from there.
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