Getting a mortgage with a default

Champagne07

Hi there,

My partner and I are "graduate first time buyers" and we recently got declined for a mortgage from Nationwide, and at first we were baffled. Combined income of around £50k, credit scores of 930 and 831 respectively and we were only after a mortgage of just over £100k (with a 25% deposit).

So, anyway, our mortgage advisor contacted Nationwide to question the decline and was told we needed to look harder at the credit score and that it was to do with "undisclosed addresses" on my partner's score.

Anyway, after we had been told this information from the lender, we went back to Experian and he added an address from uni. Update the credit score and lo and behold, it's dropped to 736 (although mortgage advisor has said anything over 700 is respectable), with a £600 default marked against him, dating back to Sep 06, with a balance of £350.

We hadn't set out to not disclose information, the mortgage advisor asked us for information about our living arrangements for the past 2 years which we willingly provided and my partner was not aware of any majorly adverse credit (he thought he had an outstanding CC of around £250 but his first pay cheque when he started work had £250 taken out by the CC company so figured that was the debt cleared).

The mortgage advisor accepts the truth (he genuinely thought it was paid off and the fact that any chasing letters would have been sent to this university address so he obviously couldn't have paid it off from them) but he is dubious of our chances with Nationwide.

We have other lenders available to us, obviously, but my question is, based on what information I have given above, now we know about this default, what are our chances of getting a mortgage with this default against his name, and would having my dad as a guarantor (he offered if a lender deemed it necessary) help our chances?

Thanks for your help and advice.

ipod_killed_the_musicshop

I can't advise on the default bit (hopefully someone else can) but we managed to buy a 100k house with a joint income of far less than you have. Then again that was before the recession came and I'm assuming the same backs who got this country into this mess are now plunging the country into deeper mess by being less willing to offer mortgages. Then again I got declined for a mobile phone contract at around the same time for no given reason (saved me a fortune on reduced bills though as I hardly made calls on it as it was!)

Champagne07

ipod_killed_the_musicshop wrote: »

I can't advise on the default bit (hopefully someone else can) but we managed to buy a 100k house with a joint income of far less than you have.

We're aiming for a 25/75 equity split as neither of us have been able to save much money over the past 18 months since we started work!

Thanks for your reply anyway. Still no word from our IFA! I've been reading other FTB posts on here and the replies and now I'm wondering if really we should wait for the massive trough in the house price fall because negative equity is not something I had really considered!

jamie304

I got a mortgage from my local BS (Cambridge Building Society) even though I had a default (2K NatWest overdraft).

I just gave them a letter from NatWest to confirm it had been satisfied in full and it was fine.

Robert_Sterling_3

You and OH applied to Nationwide.
OH missed out, accidently, a significant address.
You and OH did not get a mortgage offer.
OH then supplied the significant address.
OH had forgotten that he had not cleared an account which was connected to the forgotten address.
OH does not appear to have arranged for post to be forwarded to his next address.
OH's lender does not appear to have been given OH's next address.
OH's attitude toward debt is to say the least not one which will endear him to a future lender.
Has he now paid off the aforemention forgotten debt as surely this should now be his top priority.

Champagne07

Robert_Sterling wrote: »

You and OH applied to Nationwide.
OH missed out, accidently, a significant address.
You and OH did not get a mortgage offer.
OH then supplied the significant address.
OH had forgotten that he had not cleared an account which was connected to the forgotten address.
OH does not appear to have arranged for post to be forwarded to his next address.
OH's lender does not appear to have been given OH's next address.
OH's attitude toward debt is to say the least not one which will endear him to a future lender.
Has he now paid off the aforemention forgotten debt as surely this should now be his top priority.

Hi Robert,

Thanks for your reply. Admittedly no, OH's attitude (previous!) to debt is not great, and any lender looking at his attitude when he was a student would not want to touch him with a barge pole. Since graduating and becoming employed however, he has not taken out any credit whatsoever.

I'd just like to clarify that as we went through the IFA for the mortgage we were asked current address and previous address (not "last three years of addresses"), so we provided him with the information requested- the address that this card was connected to was not deliberately withheld from anyone, we simply were not asked to provide more information. As regards to having post redirected, it was university accommodation so although I am not sure, I imagine other than this CC there was no other post for him being sent to this address. I certainly did not get my post redirected from university addresses.

He has not yet paid off the debt as we literally only found out about it last week and were waiting for our advisor to come back to us (he was in talks with Nationwide to explain the situation). IFA came back to us today and it appears that yes the next step is to pay this debt off (not a huge issue he has over £4k in savings and the debt is £380).

IFA still is not sure what the chances are of getting a mortgage with that hanging over him (regardless of paying it off or not) and has asked around but no one will advise.

I think we may take Jamie's advice - get this paid off immediately and get a letter from the lender to confirm this and then give it a while before we apply again.

I would be interested if anyone else has had one or knows how possible it is with the High Street lenders to get a mortgage with a default.

Thanks again.

(and don't worry, I have told OH off several times about his lax attitude!)

kier333

Champagne07 wrote: »

Hi Robert,

Thanks for your reply. Admittedly no, OH's attitude (previous!) to debt is not great, and any lender looking at his attitude when he was a student would not want to touch him with a barge pole. Since graduating and becoming employed however, he has not taken out any credit whatsoever.

I'd just like to clarify that as we went through the IFA for the mortgage we were asked current address and previous address (not "last three years of addresses"), so we provided him with the information requested- the address that this card was connected to was not deliberately withheld from anyone, we simply were not asked to provide more information. As regards to having post redirected, it was university accommodation so although I am not sure, I imagine other than this CC there was no other post for him being sent to this address. I certainly did not get my post redirected from university addresses.

He has not yet paid off the debt as we literally only found out about it last week and were waiting for our advisor to come back to us (he was in talks with Nationwide to explain the situation). IFA came back to us today and it appears that yes the next step is to pay this debt off (not a huge issue he has over £4k in savings and the debt is £380).

IFA still is not sure what the chances are of getting a mortgage with that hanging over him (regardless of paying it off or not) and has asked around but no one will advise.

I think we may take Jamie's advice - get this paid off immediately and get a letter from the lender to confirm this and then give it a while before we apply again.

I would be interested if anyone else has had one or knows how possible it is with the High Street lenders to get a mortgage with a default.

Thanks again.

(and don't worry, I have told OH off several times about his lax attitude!)

Hi,

I had my Mortgage fully approved Monday and today the valuation passed so full steam ahead.

I also had a unsettled default with 02 for £835, the bank asked me to pay the outstanding amount and forwad them either a letter from 02 or an email with a contact name on, i did this and everything was fine. 02 kindly reduced the outstanding amount to £655 as i paid in full. The bank is HSBC and i am getting a 90% LTV so not like i have a huge deposit, try HSBC they were great everything finalised in less than 2 weeks from first putting an offer in on the flat. I must add they will not lend on anything newer than 2yrs old.

Good luck