Default on credit report and getting a mortgage?

Fab26

I have a quick questions about our current situation:

My partner and I are saving for a deposit to a flat. We are aiming to save around 45k for the deposit (we're nearly there) and we're planning to purchase a property worth £175,000 max. I'm on £22,500 pa and partner is on £32,000 pa. salaries.

We recently checked our credit reports and I have an "excellent" credit rating at 999 and my partner is "Fair" at 846. He has a default by a bank from 2005. It was a loan when he was a student and was struggling to make payments.

What do you think are our chances of getting a reasonable mortgage rate? Do you think we would be able to get a mortgage in the first place? We were planning to start looking in October, but it seems that we will have to wait until November 2011 if we are rejected. (That's when his default would be written off his report).

Can anyone offer some insight please?

stebiz

Lenders are being extremely picky at the moment. There is a high chance that if accepted, you will pay a higher interest rate.

Assuming 2% above that would equate to £2,700 a year. Over 5 year - you do the maths!

Is it worth it? Might be worth waiting a bit longer??

Conrad

From what you say the chance of getting accepted is fairly high, and there are lenders now that do 'high street' low rates for a case like this, subject to the extent of the default. If for example it was cleared within a couple of years after default date and it was not for a very large sum, then the odds are quite good.

stebiz

Conrad wrote: »

From what you say the chance of getting accepted is fairly high, and there are lenders now that do 'high street' low rates for a case like this, subject to the extent of the default. If for example it was cleared within a couple of years after default date and it was not for a very large sum, then the odds are quite good.

Does a 'default from a bank' and 'struggling to make payments' not suggest a rather larger default? I may be mistaken.;)

Fab26

His credit report says that the default balance was £1,528 and current balance says "satisfied" and defaulted on 16/11/2005.
Is that considered a large amount?

ztsg

My partner is in a similar situation, he has seen a house for £108,000 and has a £27,000 deposit, he has tried with 2 different lenders and they have both refused him as he has a default on his file from 2 and a half years ago, it was a small amount of £150 which was paid off a few months later, he needs to find a lender that will lend with a default, does anyone know who is the best??

becca0417

I would definitely suggest a broker. My OH also has a default (we are FTB) and saw a broker, he is brilliant and even if he doesn't get us anything, we know we have tried every avenue. A broker will know which companies to try.

herbiesjp

Fab26 wrote: »

His credit report says that the default balance was £1,528 and current balance says "satisfied" and defaulted on 16/11/2005.
Is that considered a large amount?

Irrespective of the default amount here, the LTV, and age of the default should help to get you good rates.

herbiesjp

ztsg wrote: »

My partner is in a similar situation, he has seen a house for £108,000 and has a £27,000 deposit, he has tried with 2 different lenders and they have both refused him as he has a default on his file from 2 and a half years ago, it was a small amount of £150 which was paid off a few months later, he needs to find a lender that will lend with a default, does anyone know who is the best??

You should start you own thread for this - but you could find a lender to agree a mortgage for you even with this small default.

A good broker will be able to help very quickly.

Fab26

What do you think the chances of getting a good rate with his current bank are? (it is different to the one he had a default with)

He's been with them for many years and has had a good relationship throughout.

We will have an appointment with a mortgage advisor soon!

Conrad

stebiz wrote: »

Does a 'default from a bank' and 'struggling to make payments' not suggest a rather larger default? I may be mistaken.;)

I'm noticing from your posts that you have a narrow reality tunnel that has you well and truly confined. It causes you to make all sorts of assumptions such as telling that other poster 'you will DEFINITELY get a mortgage in 2 years time' - not even Doris Stokes would be able to make that claim!

Try using objective analysis in life, rather than jumping to red neck style knee jerk impule reactions.

Open that reality tunnel bro

And here's a 'knowing' wink back to you;)