cant get motgage due to one default

Paulp85

I recently reserved a shared ownership apartment with circle anglia. They checked all my details, wages etc and they are perfectly fine for me to proceed with buying the property. Its valued at £150k and I'll be buying 39% of it for £58,500 and paying £152 rent on the remaining share.

The only problem I have is that I tried I to take out a mortgage with Leeds building society (very high rates I know but my options arent that great as its a new flat, shared ownership etc)
I was declined due to there being one default on my credit file.

It turned out to be a phone contract that I took out 4 1/2 years ago with vodafone through the phones4u shop. It was my first phone contract and I had only just turned 18 at the time. Unfortunately though the phone they sold me never worked within 1 square mile of my home and neither vodafone or phones 4 u would accept responsibility or allow me to cancel my contract. Now as I was only 18 and didnt know this would affect my life in such a huge way 4 years in the future I decided to just ring the bank and cancel the direct debit that was set up since they werent providing me with the service I was paying for!

I have now payed vodafone the £188 that I owed them but obviously it will take a while to update on my credit file.

I was just wondering if anyone has any advice for me on how I can get a mortgage and what banks will view this problem with a bit of common sense.

I am putting down 10%-15% deposit on the flat, whatever is required to get me the mortgage and I have paid off 3 loans and credit cards in the past few years without ever having a late payment or anything like that. Surely they know i'm not going to default on something as important as a mortgage!

Any advice will be much appreciated......

StuTheDon

Paul,

Paying off the default will not remove it from your file - it will only mark it settled. You may wish to contact Vodafone and ask them to send you a letter stating the default was settled and show this to Leeds Building Society

I assume you are 22 at the moment which is still quite young for a mortgage. Do you still have a credit card - it may be they dont have enough history on you to make a positive decision.

Paulp85

thanks for the reply stu,
I have spoken to vodafone and they said they will send me a letter out but Leeds say they wont accept me unless its completely removed from my file. They're obviously being extremely careful with who they lend to. I still have my credit card which has been paid off every month without fail. Anyway I went to a broker today who told me I have a better chance with woolwich or ipswich building society so i've applied to woolwich which is a whole 2.5% lower rate than leeds, fingers crossed!

Kel311

Hi, just wondering how you got on going to the other bank or building society? My husband and I are in a similar position to you. Although both of us have one or two defaults on our credit file all going back 5 years ago and settled! We have a 25% deposit to put down and our credit file apart from the defaults when we were younger have always been paid on time. My credit rating on Experian is currently at 752 and my equifax rating is 404 just waiting on my husbands score! I have written to the company who placed the two defaults to see if they would remove them as I cant ever recall receiving a default notice however, I do remember falling behind in my payments not holding out much hope on hearing back from them but worth a try. My husband and I are just married and renting at the moment we dont want to rent forever and we do have a healthy deposit and can afford monthly mortgage payments no problem at all! Just worried the bank will reject us due to the defaults wasnt sure with the healthy deposit if this would go in our favour! Any advise would be gratefully appreciated.

Paulp85

hi kel, I'm still waiting on the woolwich to get back to my broker. Apprantly this is a good thing as it means they're going to be looking at my file rather than just saying no straight away. My advice would be to go to a good broker and explain the situation. I'm new to all this but I've found that they can get a lot of broker exclusive deals and have a list of 3 other banks worth trying if I get declined by woolwich. By the way my credit file has updated and now my vodafone agreement displays "satisfied" after the default. I'm not sure if they've made a mistake but it says date satisfied as 07/01/2005 eventhough I only paid it last week..... does anyone know why this is? or have I just got lucky! default still on there though but it looks a bit better now lol