Mortgage agreed in principle

sidebarcarl

Hi there

My mortgage broker called yesterday to say that she had an agreement in principle with santander for 2.99% borrowing £149,950 for a £249,950 property.

Both myself and my girlfriend are first time buyers and are a little bit worried that we may still be rejected. Our situation is as follows:

1/. I have a very poor credit rating. It is 170 with equifax. I have just one default listed which is a £4850 credit card with Lloyds tsb. I have reduced it to £3100 and pay £50 a month. It still shows as £4850 on equifax. This is a debt that arose while I was travelling. I noticed 3 withdrawals from a cash machine in an area that I hadn't been to. I phoned and complained and asked for a form to fill in to have the payments removed. I advised them that I would not make a payment until they had sent me this form. They agreed. It did not arrive even though I made several more requests. As a result the account defaulted. On my return I complained and on the statements they sent me the withdrawals in question were no longer present. It was too late, the account was already long over due.

2/. Since my return the only direct debit I have is £50 a month to the credit agency collecting my money. I have applied for no further credit from anyone in my 2 years back in the country. I have also foolishly missed being on the electoral role. My household bills have also been included in my rent. All in all, not having any other financial commitments has kept my rating low.

3/. My girlfriend is a temp and has been with the same agency for a year with no time out of work.

4/. I have been with the same employer for nearly 12 years.

5/. We have £100,000 as a deposit.

6/. We know we can afford the mortgage as we have both been comfortably paying £520 a month rent which will cover our mortgage and bills.

7/. My girlfriends credit shows as excellent on equifax with a rating of 499. She has never missed a payment in her life.

8/. We have been totally honest with our broker about everything.

What chances are there of the mortgage application being declined if all the information we have provided matches what the broker used to get the agreement in principle?

Thanks in advance.

Occams_Razor_2

a mortgage in principle is not binding in any way, you do not have a mortgage offer.

however, if you have been totally upfront you should be ok as you are only looking to borrow 60% LTV.

Thrugelmir

Why not clear the defaulted debt?

Doesn't reflect on your attitude to handling your finances from a lenders perspective.

First_Time_Buyer_Guru

Hi Sidebarcarl

As long as you've actually filled out the application form completely openly, then fundamentally you've already passed the checking and vetting process. I can completely understand your concerns, but you should be fine.

Best Of Luck

FTBG

GMS

First_Time_Buyer_Guru wrote: »

Hi Sidebarcarl

As long as you've actually filled out the application form completely openly, then fundamentally you've already passed the checking and vetting process. I can completely understand your concerns, but you should be fine.

Best Of Luck

FTBG

Not strictly true. The DIP means credit scoring has been passed but a full application needs to go in and be reviewed by the underwriters. If the full application is approved then it is a far better indication. Once this is in then it wil be passed to an underwriter for decisioning.

sidebarcarl

Thank you all for your replies. it was mainly the credit check that worried me but if, as you say, this has already been done I can relax and let fate do it's job.

In response to frugelmir, I have not cleared the debt yet as I am going to the ombudsman with my complaint about Lloyds. It is a culmination of events that led to the default, all of which were as a result of failures on their part.

Thanks again.

First_Time_Buyer_Guru

GMS is absolutely right that it's not the end of the road for the decision, but I feel the credit check is the major stumbling point for most people, and especially for first time buyers, who as a demographic tend to come to the party with a history of debt (educational loans etc.).

Good Luck sidebarcarl.