Mortgages, satisfied defaults and poor credit.

gemmacantan1

Hi all,

I know this is probably a key topic on this forum but I just want to understand some more of my position say in a year or so times. Currently my defaults have roughly 2 years and 6 months left before they disappear.

I have given as much detail as I can. Oh, we earn £35k together. So we don't have the option for my husband to do it on his own. Unless we take out a second mortgage in his name? Not sure how that would work. Our current mortgage is £101k with 38 years left its just changed to variable so is now 3.49% (previously 5.49%).

A few months ago I started investigating my options and we were a little ambious wanting a £187k house when our joint salaries weren't enough to get the loan. So have realised that we're looking at more around £165k which is fine with a 20% deposit of £33k giving us a mortgage of £132k ish which is more than affordable and according to my investigating should be fine with most lenders.

I contacted my original broker who looked at my credit report and said the 5 defaults I had been settled and this was a bonus when applying for a mortgage. I approached my original lender who is no longer offering mortgages. My defaults were originally register 3 years ago totalling £5125 of various credit cards/store cards. Are broker contacted me and said that because they were settled and only had 3 years remaining that Halifax would consider us, I was a bit unsure but thought she might know what she's doing etc.Anyway she went away and started doing some sums and then worked out that we could get a 60% mortgage. I was kind of confused but later realised that she hadn't allowed for that fact that 25% of our house was owned by the housing association so in fact we didn't have that size deposit.

We then found a house strangely through the Halifax and they offered to take a look at our mortgage working on a deposit of 15 - 20% a maximum of 20% as we are already borrowing money from family! Anyway she went away to do her sums not telling me that she was going to do a mortgage promise, I didn't hear anything for about three weeks so contacted them and got some other lady who told me that my application had been declined, what application I said, she was just offering me 'what we can borrow, the term and all that stuff but apparently and looking at my credit profile she'd done a full credit search and obviously two of the defaults hadn't appeared as settled so I wasn't surprised. So I knew that if my broker went through with the application the same thing would happen.

Anyway after that long expanation we have decided to put moving on hold for as long as we can in an attempt to improve my credit profile. It has improved from a very poor profile to a poor profile but one of my defaults with halifax is still waiting to be changed (they are taking their time) but I'm sure by the new year it should be. My husband has a good great history with no late payments and only one credit card with a small balance on it so he's completely clean.

Our fixed rate mortgage has just ended so we are currently variable and saving the difference towards moving etc. My biggest question is if I leave moving until my defaults are only one or two years away from being rewritten off will I have better mortgage options. I know sub-prime mortgages are now non existant but there has to be someone that might consider us considering for the last 3 1/2 years I've mantained all my payments on time and without problems.

I can't leave moving until my defaults are rewritten off as our growing family is currently squeezing in to a 2 bed terrace house without a garden. I suppose alot of this is unsure because of the recession and what not but it would be nice to hear someones views or probability.

My other problem is one of my defaults was for a credit card with Halifax the balance was £1000 its completely cleared now but I think that will stop them lending me money for my mortgage right?

Any advice would be great

Thanks
Gemma

happybroker

Hi Gemma, Platform (now part of the Co-op) have a mainstream range that ignores defaults over 3 years old. and the rates are quite keen too. They will go to 80% lending too.

You can't apply directly and not all brokers have access to them unfortunately but it sounds like you may be ok given current criteria.

gemmacantan1

happybroker wrote: »

Hi Gemma, Platform (now part of the Co-op) have a mainstream range that ignores defaults over 3 years old. and the rates are quite keen too. They will go to 80% lending too.

You can't apply directly and not all brokers have access to them unfortunately but it sounds like you may be ok given current criteria.

I was hoping that would be the case. Some mention that some lenders will just asked for a bigger deposit which at a push would be okay. I hope by the time we get around to doing it all next year that more lenders might be offering this sort of product.

Many Thanks I will defiantely look into it.

Gemma