First time buyer with defaults over 12 months ago

blockjenny

Hi

I'm just wondering if I would have any chance with a mortgage application. I earn approx £36K, have saved a £10K deposit and have now cleared all my debts now other than a £1200 authorised overdraft. Over 12 months ago, I did receive quite a few default notices where I made payments on a few credit cards just over 1 month late. Any advice gratefully received.

beecher2

The defaults will be on your file for 6 years so won't help your chances. Clear your overdraft with your savings as living in an overdraft doesn't look good. Do you have money set aside for fees? Take your credit file to a mortgage adviser to see what they say.

blockjenny

Thanks for that - yes have put some money aside for fees and thanks for the advice about clearing the overdraft will do

edinburgher

Please note that your deposit is fairly small in the grand scheme of things (for example, it would be 10% deposit on a £100k property). This is all well and good if you're looking for somewhere affordable, but getting access to higher LTV mortgages might be harder as you have recent defaults.

This is just offered as general commentary - go see/speak to a professional for some proper advice. I'm also looking to buy in a year or so and have a default on my credit report (although just the one and it's a good bit older than yours).

TMoose

blockjenny wrote: »

Hi

I'm just wondering if I would have any chance with a mortgage application. I earn approx £36K, have saved a £10K deposit and have now cleared all my debts now other than a £1200 authorised overdraft. Over 12 months ago, I did receive quite a few default notices where I made payments on a few credit cards just over 1 month late. Any advice gratefully received.

Are you sure they are defaults, or just late payments? There is a huge difference.

Late payments are just that - you've made the payment, but it's late, but you're now back on track. This is serious, but not insurmountable.

Defaults are usually when you've missed 3 or 4 in a row, and the lender has passed your details on to a debt collection agency, and they've sent you notice to default you, close your account and demand the full balance. This is very serious. And probably very bad news for morgage purposes.

Moose

blockjenny

Hi

Thanks for all the advice - yes looking for somewhere affordable, and in my price range of approx £100K which is available in my location. I did receive a letter to say it was a default notice, but they didn't demand full payment or close the account, the payments were made, just late.

paint

blockjenny wrote: »

Hi

Thanks for all the advice - yes looking for somewhere affordable, and in my price range of approx £100K which is available in my location. I did receive a letter to say it was a default notice, but they didn't demand full payment or close the account, the payments were made, just late.

If it's just one or two months it'll be a late payment and not a default (despite what any letter says), in which case I wouldn't worry about it. Get a copy of your credit file from one of the credit reference agencies if you're unsure.