Refused mortgage with bad credit

wayne5393

Hi all, i have an outstanding debt of £4200 with Natwest which they then passed on to Westcot creidit services. For a while i have been making stupidily small weekly payments to keep them happy. Now the time has come for a mortgage,( i got refused by santander yesterday) i spoke to Westcot and they said if i pay £2200 now the debt would be cleared. I then made them a counter offer of £1500 and im now waiting to hear back from them with an answer.

If it does get accpeted and the debt does clear, how long will it be before my name is clear and i can then start being accepted for credit?

BoGoF

6 years.....you do realise your credit rating is now trashed ?

rdchick

You probably should have checked your credit files before applying for something as big as a mortgage, chances are you probably have ruined your chances for 6 years but you do need to check your files to find out more

fermi

I presume that you have a default on your credit files for this debt?

The default will stay for 6 years from the date it was first placed, regardless of whether you pay the debt off or not.

If you settle the debt, it will simply be updated to say settled or partially settled, but the default will stay.

With the default, even a settled one, you are still likely to have trouble obtaining any mainstream mortgage/lending.

Also, how are you negotiating with the debt collector?

This needs to be done in writing. Before you accept any offer you need need it in writing from the owners of the debt that:

- what you pay is accepted in full and final settlement,
- you will no longer be liable for any remainder,
- the remainder will not be chased or sold on
- your credit files will be updated to show that the debt is settled in some way.

wayne5393

Hi all, thanks for the info fermi, i have made an offer of £1500 and was accepted, the lady at WESTCOT CREDIT SERVICES said they will send out a letter confirming that once the payment has been settled then there will be no furthur payments and the debt will be clear. While i was waiting for them to get back to me with an answer i also got up my £2 credit reprt from EXPERIAN, the default started in Dec 07 and states that the debt will stay on my file from the start of the default for 6 years.

There was a few other things on there aswell like insurance quotes which the company did a search on me, im guessing these are not bad because they were not debt. But other than that im ok.

Once i have paid off the debt in the next week or so and my file has been updated will i be ok to get credit or is it best not to even try for a while?
Im trying to buy an house while they are still cheap?

suicidebob

As others have said, you won't get a mortgage until the default has cleared - January 2014

Tixy

Its possible to get a mortgage with a settled default on your file - but it won't be from the high street lenders or at the best rates - and you might need a larger % deposit that you otherwise would have done for your circumstances.

If you are still considering buying then its best to speak to a independant mortgage advisor and make it clear to them that you have this default so they'll know who to consider as a possibility.