Mortgage Query - FTB

Jonesy_21

Hello,

I am new to this forum so please forgive me if I am posting int he wrong area.

I was wondering if anyone would be able to offer me any advice. My Boyfriend and I are hoping to apply for a mortgage in the next few months, we are first time buyers. He has a fantastic credit rating but unfortunatley mine is not so great (545!), this is due to a default that had been placed on my file in February 2007 (Nationwide credit card). I understand that this will stay on my file for 6 years. I have since then kept my finances in check, I currently have an overdraft with my bank (NatWest) and 2 credit cards which I ensure all payments are made on time (I am hoping to be able to clear these before applying for the mortgage).

Do you think that this will stop me getting a mortgage entirely. I realise that there is a very strong chance that we will have to pay over and above any going rate due to this but I am really worried I am going to be penalised for one silly mistake that was made nearly 3 years ago.

Any advice would be gratfully received.

Many thanks

Kelly

Let_Us_See

One default, as long as it was dealt with promptly, almost three years ago should not prevent you from obtaining a mortgage.

However, with only one default in almost three years, I would expect your credit score to be higher?

Could you explain the exact details of the default?

herbiesjp

One default CAN cause problems

You have not stated any figures i.e. property value, mortgage needed/deposit, incomes and so it is difficult to say.

The higher the LTV the tighter the scoring with lenders.

Jonesy_21

Hi there,

Thanks for your replies.

I do not have any figures for the mortgage in terms of what we can borrow etc as we haven't seen a financial advisor yet. We are on a joint income of £55k and have a deposit of £9k.

The default was on a Nationwide credit card - It totalled £1295 and I entered into an arrangement to pay with PayPlan. I kept to this and paid off the total that was agreed. My credit file now states "SF Satisfied" but the default was put onto the account in Feb 2007.

I also have 2 "Arrangements to Pay" on 2 other accounts, one credit card and one loan - both of these were factored into the payment plan with PayPlan but these have not had Defaults marked against them.

I should also tell you that I changed my bank account at the begining of the year and moved house - I have been advised that both of these things can affect your credit score - is this true?

Sorry about all the questions - this really is a mindfield for me and I wanted to get it straight in my head before Ipotentially go and embarass myself in front of financial advisor.

Thanks for your help

Let_Us_See

Ah! A little more than one default. Go and see a whole of market adviser and take along your latest credit file and explain your position. There really is no need to feel embarassed.

Jonesy_21

thank you - I really appreciate your help - would an Arrangement to Pay have the same adverse effect as a default?

herbiesjp

Jonesy_21 wrote: »

Hi there,

Thanks for your replies.

I do not have any figures for the mortgage in terms of what we can borrow etc as we haven't seen a financial advisor yet. We are on a joint income of £55k and have a deposit of £9k.

The default was on a Nationwide credit card - It totalled £1295 and I entered into an arrangement to pay with PayPlan. I kept to this and paid off the total that was agreed. My credit file now states "SF Satisfied" but the default was put onto the account in Feb 2007.

I also have 2 "Arrangements to Pay" on 2 other accounts, one credit card and one loan - both of these were factored into the payment plan with PayPlan but these have not had Defaults marked against them.

I should also tell you that I changed my bank account at the begining of the year and moved house - I have been advised that both of these things can affect your credit score - is this true?

Sorry about all the questions - this really is a mindfield for me and I wanted to get it straight in my head before Ipotentially go and embarass myself in front of financial advisor.

Thanks for your help

Print off a copy of your credit file and discuss this with a whole of market mortgage adviser.

Trust me I have seen a lot worse than that - and there is nothing to be worried about.

This will need a good broker discussing with a lender verbally beforehand in order to double check criteria and see how they "feel" for the application.

In the current climate anything adverse is extremely difficult to place, but depending on your overall situation you may well have some options.

However with adverse you will need more than £9k deposit - more like 25% deposit at least.

Jonesy_21

Thanks Herbiesjp - I will make an appointment to see a whole of market mortgage advisor.

Can I just ask, you say you have seen a lot worse than my situation, did these people manage to get a mortgage?

Thanks again for your help. I really appreciate it

Kelly

herbiesjp

Some have been able to and others have not - it depends on the exact personal circumstances.

I haven't seen your credit file so cannot comment as to how easy/difficult it would be for you.

The main problem you have however is lack of deposit.

You will need far more than the £9k saved up already.