Refused Mortgage need some advice

sdp80

I applied for a mortgage in jan/Feb of this year - I am a director of a private ltd company (and I am also an employee of this company) I own 25% of it. I earn a decent wage (but have very little deposit only 10% or so) and so went to HSBC for my application as they do my business accounts and we have a good relationship.

I went through the whole application, everything was looking good until they credit checked my and it came back as refused - they wouldnt tell me why. I ended up going to HBOS after that and they credit checked me and although he said he couldnt say, he did tell me it was something to do with a mobile phone account I had a few years ago.

The incident in question was about 4 years ago I think with O2 when I had a dispute with them, I decided to cancel my direct debit and refused to pay - yes it was silly I know, but I was young and stupid! Anyway the dispute with O2 eventually got settled when the Iphone 3g came out - I wanted to buy one but had to clear my O2 debt first which I did. Then O2 were happy to provide me with credit again, unfortunately the banks are not.

I am thinking about applying for a mortgage in 3 months time - I am just wondering if there is anything I can do to make the process easier and get accepted for a mortgage. I would like to go with Lloyds as they are happy to treat me as employed (as opposed to self employed) due to owning less than 30% of my business - most banks treat you as self employed if you own more than 25% of the business and at that point things get more complicated.

I would like some advice please - I am also weighing up the possibility of getting a broker as I was hoping they might be able to help negotiate should my credit report come back as negative.

Sorry for the long post but I would love to hear your advice.

herbiesjp

Have you got an up to date copy of your credit file?

Is this problem registered as a default? Or a CCJ?

When was it first registered? When was it cleared?

And how much was it for?

At 90% borrowing, you need to be squeaky clean in terms of your credit file.

sdp80

herbiesjp wrote: »

Have you got an up to date copy of your credit file?

Is this problem registered as a default? Or a CCJ?

When was it first registered? When was it cleared?

And how much was it for?

At 90% borrowing, you need to be squeaky clean in terms of your credit file.

It never went asfar as a CCJ or anything like that - I would not be that stupid. It shows up in my file as so many months of arrears.

I cleared it about 2 years ago now I think and it was for £200/£300

Its funny because I have cleared off a 50k mortgage, a 12k secured loan, 1.5k a personal loan within the past 6 years so you would think this would work in my favour and look good on my file but instead the banks focus on a £200 settled debt with a mobile company that has since given me credit!

I couldnt manage anything other than a 90% LTV mortgage - would a broker be able to help me and do you think I would be able to get a mortgage with a more leniant bank - It was frustrating back in Jan when I got refused but I jsut put it down to the recession and banks being much more strict when it comes to lending.

herbiesjp

sdp80 wrote: »

It never went asfar as a CCJ or anything like that - I would not be that stupid. It shows up in my file as so many months of arrears.

I cleared it about 2 years ago now I think and it was for £200/£300

Its funny because I have cleared off a 50k mortgage, a 12k secured loan, 1.5k a personal loan within the past 6 years so you would think this would work in my favour and look good on my file but instead the banks focus on a £200 settled debt with a mobile company that has since given me credit!

I couldnt manage anything other than a 90% LTV mortgage - would a broker be able to help me and do you think I would be able to get a mortgage with a more leniant bank - It was frustrating back in Jan when I got refused but I jsut put it down to the recession and banks being much more strict when it comes to lending.

The fact it was late/missed payments as opposed to CCJ or default is better.

The low disputed amount would also be in your favour.

You would indeed be better off going via a broker, as they would be able to research which lenders would be more sympathetic to your situation. However, you would need to have an up to date copy of your credit file.

sdp80

herbiesjp wrote: »

The fact it was late/missed payments as opposed to CCJ or default is better.

The low disputed amount would also be in your favour.

You would indeed be better off going via a broker, as they would be able to research which lenders would be more sympathetic to your situation. However, you would need to have an up to date copy of your credit file.

Ok thanks for your help - I shall be on the lookout for a broker - do I need a broker in my area (Glasgow/West of Scotland) or will anyone do (i.e. someone recommended on these forums perhaps)?

herbiesjp

Any broker can help, as long as they know what they are doing

Conrad

Be aware at 90% broker deals are worse than direct deals. I do direct deals for clients, helping them get the application accepted but as no commision is paid, clients pay a fee instead. Find a broker who will look at direct deals too. To be frank not many brokers will be able to get this through.

It can be done though.

Good luck.

sdp80

Conrad wrote: »

Be aware at 90% broker deals are worse than direct deals. I do direct deals for clients, helping them get the application accepted but as no commision is paid, clients pay a fee instead. Find a broker who will look at direct deals too. To be frank not many brokers will be able to get this through.

It can be done though.

Good luck.

So your saying I am not likely to get a mortgage, through a broker, with the way my credit report is i.e. with the negative O2 missed payments showing up?

herbiesjp

No.

There may be cheaper deals going direct to a lender than via a broker.

Those of us (brokers) that offer to research direct deals, will need to charge a fee as the lenders will not pay us for the submission of those applications.

So you should still go via a broker, but make sure they can find the best deal on the market for you (including direct deals).

sdp80

herbiesjp wrote: »

No.

There may be cheaper deals going direct to a lender than via a broker.

Those of us (brokers) that offer to research direct deals, will need to charge a fee as the lenders will not pay us for the submission of those applications.

So you should still go via a broker, but make sure they can find the best deal on the market for you (including direct deals).

Ok thanks - I understand now! Thanks for your advice.

All I am really interested in is getting approved for a mortgage when, at the beginning of the year I was refused when I went direct to a bank to apply.

sdp80

I have just checked my credit report with experian and equifax.

My experian credit reports seems ok with a score of 750ish.

My equifax report is poor with a score of around 400 or so - at this point I realised that I do have a default with O2.

Although the default is settled and was for under £300 - is it going to be difficult/impossible for me to get a mortgage?

I have been in touch with O2 credit team to see if I can get the default removed - I should have asked this at the time of getting my 2nd O2 contract which I got after paying the default off.

I have e-mailed them using the advice I have gotten here: learnmoney.co.uk/credit-file/remove_default_notice.html

I would appreciate any advice - especially any brokers out there that could help me in my situation.