Desperate help needs to remove default history for mortgage!

puredew77

We've been rejected number of mortgage application due to the fact that we both are not permanant resident and one of us has 2 default history in the credit repport.

We both are from republic of Korea and have 2 year work visa left which is until October 2013. We are entitled to stay in UK until the above period with working for the current company who supported me to get the work permit as well as work visa.

My previous mortgage advisor said that work visa and default history aren't the best combination.

Here are the questions,
1. the latest default history settled in Dec 2009, which means that we are not entitled to apply for any mortgage until Dec 2015 which is the 6th anniversary?
Both default accounts have been cleared the whole balance and there are no outstanding balance in any of accounts. So the finance situation has been definitely improved and we been made fairly good payment habit on credit card, too. Do you think there is any possible way to demonstrate ourselves to lender about the improved finance situation so it could help to arrange the mortgage?

2. I will be on maternity leaves soon from mid October. Of course the current company will keep me as their employee, so there will be no changes on my visa status, however our current income will be reduced based on their maternity packages. If our credit history gets better during my maternity period so we are eligible to apply for the mortgage, do I have to give my current incomes based on the maternity package to lender?

As you could imagine, baby's coming soon so we are pretty desperate to arrange a mortgage so we can move in the house before baby comes..

I look forward to hearing all your kind advice to help our situation.

Many thanks in advance!

Tixy

puredew77 wrote: »

Here are the questions,
1. the latest default history settled in Dec 2009, which means that we are not entitled to apply for any mortgage until Dec 2015 which is the 6th anniversary?
Both default accounts have been cleared the whole balance and there are no outstanding balance in any of accounts. So the finance situation has been definitely improved and we been made fairly good payment habit on credit card, too. Do you think there is any possible way to demonstrate ourselves to lender about the improved finance situation so it could help to arrange the mortgage?

You can apply for a mortgage at any time, even with defaults but most of the high street lenders won't consider you with defaults still on your file. You'd need to talking to your broker about subprime mortgages (and expect higher interst rates and need a bigger deposit). Assuming you did default on the debts then you won't get the defaults removed.

2. I will be on maternity leaves soon from mid October. Of course the current company will keep me as their employee, so there will be no changes on my visa status, however our current income will be reduced based on their maternity packages. If our credit history gets better during my maternity period so we are eligible to apply for the mortgage, do I have to give my current incomes based on the maternity package to lender?

you will need to explain that your salary is X but that you are currently on maternity leave and only receive X. Its likely to have an impact on getting a mortgage and it would be advisable to wait until you are earning again.

I doubt you will find a mortgage at the moment, unless you have a very large deposit and are willing to accept a very high interest rate.

The defaults will certainly make things difficult for you but I would think not being permanently UK resident will make things even more difficult. You might want to try posting on the mortgage section for some advice, as there are mortgage brokers who post on there - Mortgages & Endowments and who might be able to advise about how easy/hard it is for foreign nationals to get mortgages.

RAS

What sort of savings do you have for a deposit?

bargainbetty

Many banks will not offer mortgages to people who do not have permanent residency in the UK, because there is no guarantee that the person will be allowed to stay, and not every country has an treaty allowing for the pursuance of debt across borders. There have been cases where an asset is purchased via loan, sold off via another bak, and the loan in then defaulted. If they can't guarantee they could get the money back, why would they lend it?

My brother is a former mortgage advisor for one of the big high street banks, and he had to refuse a semi-famous popstar a mortgage because the man declared his residency as the USA for tax purposes. Brother-mine knew that the man could repay the debt on UK royalties alone, but he couldn't give money to a non-resident at that time, without additional assets being held for security. The rules may have changed, but given the difficulty people have in getting a mortgage now, it might make a huge difference that neither of you have permanent residency.

puredew77

Surprisingly at this point, our non-permanent residency wasn't the main issue. The main issue is two default history in my husband.

I understand there aren't many lender would be happy to lend the money to non-permanent residency, but there are few still allows.

Could anybody give us more advice on clearing our default history rather than our non-permanent residency. The reason why I stated my residency status was to ensure that you are aware of our full situation.

We found a house, market value GBP 325,000 and have currently 30% deposit sitting in our saving account.

Many thanks!

Tixy

If your husband defaulted on the debts then you won't get the defaults removed.

What sort of accounts were the defaults against? does he dispute that he got behind with repayments?

RAS

So what will your joint income be during your mat leave?

dancingfairy

You can't remove defaults unless they were incorrectly applied - ie you weren't behind and there was some sort of error or mix up as far as I am aware.
You will probably need to wait 6 years for it to drop off the credit file - obviously the longer ago it was the less important mortgage lenders see it as being but each lender will have their own rules and regulations and there is no set way of dealing with a default as far as I know. You will need to speak to a whole of market broker who should hopefully have an idea how much of an impact it will have -also I don't know whether some companies rely on humans to approve mortgage applications and use their judgement or whether it is all done by computer. Obviously if you get someone sympathetic to look at your application then you will probably have more chance than relying on a computer alone - again your mortgage broker should be able to advise you where you have the most chance of acceptance but there is no guarantee.
You could look at buying in your name alone but then they would look to see if you can afford the mortgage in your name alone too.
Sorry there are no easy answers for you.
df

puredew77

Many thanks for your kind replys.

Expected joints income during my maternity leaves are around GBP 3,000 after tax for first 6 weeks and it will go downs to GBP 2,000 after tax after 6 weeks.

Many thanks

RAS

puredew77 wrote: »

Many thanks for your kind replys.

Expected joints income during my maternity leaves are around GBP 3,000 after tax for first 6 weeks and it will go downs to GBP 2,000 after tax after 6 weeks.

Many thanks

Hi doubt you will be able to borrow more than £96,000 based on this income anyway and since the bulk of it depends on your OH who has the defaults???

puredew77

Hi Ras,

Those figure for a monthly income. I don't know how you came up with those number.
I thought that normally lender allow the mortgage about 4 time more than the annual income. right?