Can i get a mortgage with a default?

Sheridan26

hello,

I am after some advice if possible.

Heres the situaution.

When I was 17 I took out a loan with HSBC for £15,000.

I then defaulted on the load in 2005 owing £11,000. They have passed the debt onto a third party and I am paying £50 a month back. It stands at just over £9,000.

It took me a while to gain credit but since 2007 I have been building my credit history back up. I now have two credit cards (High interest), Phone contract and never miss a payment. I am always careful to overpay even if its £5 a month.

In this time I have even managed to get credit on a car for £12,000 which I never missed a payment on and have paid back in full.

This was all done whilst registered at my mothers address.

I moved out to rent at my cousins and was taken off the electral roll at my mothers - thus not living anywhere.

Last year I moved into my girlfriends parents house where we have been saving for a deposit on a mortgage. I am on the electral roll here, her credit history is perfect, she has 999.

Since I have moved here we have saved the 10% for our flat, put in an offer and its been excepted.

I earn £37k, she earns £32k - the flat is £120k.

I have credit checked myself using experian and my credit score is 956 - but this is due to the fact that its based on my girlfriends parents house

We applied for a mortgage with Halifax, passed and received an Agreement in Principal - then it went to the under-writers and they rejected our application.

Apparently they do not need to tell me why, the lady was helpful and said it was due to my credit history at previous address.

Assistance please:

The default is 6 years old in Ocotber 2011. I have been told it will come off my credit report then.

We really like the property - is there anyway to get around this now?

If i paid the default off now( Im sure the company will accept £4,000) will halifax then turn around and give me a mortgage? i have heard the term historic default used. The problem is now the under writers wont speak to me.

if I left it to October and it comes off my credit file, will I still struggle to get a mortgage until its been paid?

Thanks for reading and your assistance

S

DJR2011

hi

Best people to get advise from is the mortgage advice bureau they will be able to give you free advice on what is available due to your circumstances, i am in similar situation the halifax rejected us also for a mortgage and i'd already sold my house, they've advised us a on few ways to go about it, wait a year and clear defaults don't take any credit out on anything else they said lenders will then see they are a year old since default (we have 2 between us for catalogues), or ask parents/ parent in laws to see if they can help we could get a mortgage but we'd need a 30% deposit for the house, or ask parents to buy to let the property we wanted were we could say in a year or few years time buy the property off them also possibly generating more equity that we could use to put towards our deposit, or ask parents to use equity out of there house to help, not willing to do the last one so think we will stick with renting still and save as much as possible!

Good Luck let me know how you get on !!



Sasha

maninthestreet

Sheridan26 wrote: »

hello,


I then defaulted on the load in 2005 owing £11,000. They have passed the debt onto a third party and I am paying £50 a month back. It stands at just over £9,000.

It will take you over 15 years to pay off that debt.
Pay off your debts BEFORE taking on any more.

HappyMJ

maninthestreet wrote: »

It will take you over 15 years to pay off that debt.
Pay off your debts BEFORE taking on any more.

I don't understand either. Why save for a deposit whilst having unsatisfied defaults on your credit record?

Wait till October before trying to buy and then don't apply with the Halifax. You'll have to wait 12 months before applying to them.

StuTheDon

Out of curiosity, how did you get a loan when you were 17? You need to be 18 to legally obtain credit?

A good broker should be able to help you out.

maninthestreet

Having read the opening post again, it seems the OP has managed to secure another loan of £12,000 for yet another car. This is on top of the £9,000 he's still paying back at £50/month for his first car. So he has £21,000 of debt, and an income of £37K. The only thing that surprises me as that HSBC gave him an AIP for the mortgage in the first place.