Problems getting a Mortgage- large deposit

FraidSo

Hi,
I have had an offer accepted on a house for £217,000. We have 40% deposit and have just been turned down for a mortgage with Alliance & Leicester. I have two defaults on my credit file totalling just over £700. Both have been settled in full, although one has not been updated as being settled by the creditors. My partners credit history is fine and we are only looking to borrow around 3 times our combined salary. Is it likely that others we apply for will turn us down too? We are now trying with The Coventry but I'm worried that the more we get credit checked the lower our scores will go. In people's opinions, is the only option with the criteria stated above to go for a credit impaired mortgage of 6% or higher??!! Any help/ opinions would be really appreciated.

Many thanks

luckyfool

How long ago were the defaults registered, and how long ago were they satisfied?

Prime underwriters are understandably skeptical if unpaid debts get cleared off 5 minutes before you are applying for a mortgage, i.e. it looks like you are paying them off just to get the mortgage, not because you are a "responsible" borrower. Normally they would look for them to have been paid off for at least 12 months.

With that kind of deposit you have a good chance of a prime lender, even if not there is at least one prime/near prime lender that don't credit score and ignore defaults, that with that kind of deposit would offer a 2 yr fixed just over 5% or tracker just under 5% (if the defaults are all 3 yrs old), and even if the defaults are more recent would still keep the rates under 6% at least (though their arrangement fees are higher than average). Also if your bank statements for the last 12 months or so show good conduct I can think of a building society off the top of my head that likes quirky deals with big deposits who might assist.

FraidSo

Thanks for the reply. The biggest default (£600) is showing as settled in Oct 2006. The one that has not updated yet which was only for £130 was settled about 6 months ago. I have spoken to the creditors who have advised that they have now notified the referencing agencies of the settlement- but will this mean that it will show up as only just being settled? Or will it be back dated? I have two credit cards both of which have full clean payment history of over two years, and my bank statements show regular income etc. Any names of mentioned building societies/ lenders that might be able to help?

thanks

happybroker

in my experience A&L would turn this down I'm afraid and so would others but there are some that would look to help.

The Coventry are pretty good at this sort of thing but there are others.

FraidSo

Thanks for the info. The conventry is our next step...