Getting a mortgage with defaults

gazfocus

Our tenancy agreement is up in September and we're just wondering whether it's worth looking to buy a house and going onto a rolling tenancy for a couple of months or whether we should continue to rent.

So, I've signed up to Equifax's version of creditexpert and got my credit report and I've got 2 defaults on my report from mobile phone contracts that defaulted in 2006 (one is dated 03/2006 and one is dated 10/2006) but according to a previous credit report, they should both be 10/2006.

Both of these accounts have been settled this week (one was £345 and one was £667).

I have been building my credit report up over the past 12 months and have a Capital One Credit Card, Vanquis Credit Card, Three Sim Only Contract and a Littlewoods account. All of these have been paid off in full every month. I've also got an overdraft on my bank account but this will be paid off by the time we think about applying for a mortgage.

I was just wondering what my chances are likely to be of getting a mortgage offer with the 2 defaults on my credit file. Will it go against me that they've only just been settled?

Senior_Paper_Monitor

You are not going to get a 95% mortgage or probably even a 90%.

But, dependent upon the rest of the background - salary, employment record, type of property etc - it may well be possible with some mainstream lenders.

You refer to we/our and then switch to I - which is it, what is the other persons position ?

My advice (hardly breaking new round I admit) is talk to a mortage broker and give them full details.

gazfocus

Senior_Paper_Monitor wrote: »

You are not going to get a 95% mortgage or probably even a 90%.

But, dependent upon the rest of the background - salary, employment record, type of property etc - it may well be possible with some mainstream lenders.

You refer to we/our and then switch to I - which is it, what is the other persons position ?

My advice (hardly breaking new round I admit) is talk to a mortage broker and give them full details.

Thanks, yeah, I appreciate we may struggle for a 90% mortgage, although we were hoping for a vendor gifted mortgage with halifax or something (but not the end of the world if not) as we'll just have to save a bit longer.

My employment is full time, I've only been with the company since last September though, and would be looking at a mortgage at a maximum of 4 x annual salary but hopefully less (we only want a small house to get on the property ladder).

My fiancee (soon to be wife ) is not working due to a disability so thought we'd have a better chance of getting a mortgage if I applied for it myself. The only money my fiancee will be getting is DLA at about £3200 per year, and not sure whether this would be allowed as 'income' on a mortgage application anyway.

Is it better to go to a mortgage advisor at say Halifax, an estate agent or an independant one? Would one charge for an initial discussion?

katsu

Go to an independant advisor. I only paid my most recent one when we accepted the mortgage they offered. Initial discussions were not chargeable.

gazfocus

Thanks, any idea where's the best place to find one?

Senior_Paper_Monitor

Most lenders will not ignore spouse these days. Some lenders will allow benefits of this nature to be included (and I would have expected her to receive more than that).

The prime skill of the mortage broker is to select the lender most suited to your circumstances.

Do not go to the Halifax 'adviser' - 'cos they are not. They will press the buttons (and incur the credit checks) to see if you fit their products/criteria.

Preferably do not go to an estate agent adviser (particularly if buying a property from them).

As Katsu says - independent / whole of market (and most will only charge you - assuming there is charge, but more and more do by necessity - when a decision to proceed is made / and I know none who charge you for an initial discussion or look from any commitment from you at that stage) and someone who you fell comfortable with.

Senior_Paper_Monitor

Friend or relative recommendation is best.

If nothing on that front - www.searchmortgagebroker.co.uk, www.unbiased.com, www.freeindex.co.uk and many more.

gazfocus

Senior_Paper_Monitor wrote: »

Most lenders will not ignore spouse these days. Some lenders will allow benefits of this nature to be included (and I would have expected her to receive more than that).

My fiancee currently also gets Employment & Support Allowance but when we move in together, she won't be entitled to it. We need to look into whether she can claim the carers allowance portion of the DLA because she won't need her mum caring for her anymore so that may be an extra £55pw but don't want to count our chickens so to speak.

I just had a go on the Barclays mortgage calculator and adding my fiancee's £3200/yr dropped the mortgage amount from £79k to £69k which seems a bit harsh.

Will look into mortgage brokers to see if we can get an appointment with one to see what they suggest

gazfocus

We've got an appointment next Monday to talk to a mortgage adviser so will update the thread after speaking to them