Desperate for a mortgage but have been declined, can anyone help!?

leedjmeldrum

My partner and I are looing to take out a joint mortgage on a property with a 52% share equalling £130,000. The market value is £250,000. This would be a shared equity, new build property through an affordable housing scheme in Scotland.

We were successfully choosen by our local council but are now struggling to get a mortgage after being declined twice by Halifax.

After being advised by Halifax to view our credit reports it then became clear that my partner and I were on the electoral roll at our previous address, we then changed that (although the changes will not take effect until september). To make things worse, I have a default from 2006 with natwest. My partners credit score was good other than not being on the electoral roll. My score was also good (900 out of 999 on experian) but obviously not good enough.

We are completely clueless as to what to do now, where to go from here and need advice as to where we stand. Is it possible to still get a mortgage given the circumstances? We really don't want to miss out on this property and are willing to do whatever we have to in order to get this house.

Hope someone can help!

Lee and Rebecca

m00m00

how much of your own money are you putting in as deposit.
the higher the ltv, the more squeaky clean your credit record has to be, and the default will do much more damage to it than the electoral roll information. Your default will drop off on it's 6 year anniversary next year.

Barny1979

Out of interest how come an affordable housing scheme is available for a property of £250k value? Is it for a large family?

beanielou

You should try a mortgage broker to see if they can help.

hcb42

on the other hand, you might have just been saved..

holly_hobby

The massive problem is that you are after shared ownership (a select area of lending as it is) compounded by a current default.

Defaults run for 6 yrs from date of registration, and will expire i.e termed as "fall off" your credit record shortly after their 6th anniversay. (it would be wise if to check with CRAs if this has happened about 2/3 following the relevant expiry date).

Your default is from 2006 + 6 yrs = 2012. (can you wait until next yr is the first question ?)

If you can't, you may want to consider (if you have the capital) in settling the default - and have your credit record amended accordingly and then apply.

The satisfaction of the DN would indicate to the lender that although there were previous financial issues, they have been resolved, upon which you have satisfied the outstading credit. A brief explanation as to the underlying issues of its registration will also help your cause.

If the DN is the result of a genuine dispute, give full info as to the basis of the dispute and why you felt it necessary to withhold payment from the creditor.

Otherwise wait till 2012.

Suggest either way, a visit to a whole of market broker, which will save you the legwork in locating a suitable lender for your requirements.

Hope this helps

Holly

leedjmeldrum

Thanks for the replies! So financially we can come up with a maximum of 25% deposit. This is based on a 52% share of the property.

We have been in continuous contact with a mortgage broker who we now feel has done work that we could have done ourselves. Nothing seems to be guaranteed, everything seems to be trial and error.

With a baby on it's way we were so fortunate to be selected for this property and would be mortified if we were to let this opportunity go. We are now clueless as to what to do and where to go as we have tried everything and have just 10 days before all missives are to be completed.

kingstreet

leedjmeldrum wrote: »

Nothing seems to be guaranteed, everything seems to be trial and error

That's exactly what getting a mortgage is these days. You input the details and see what comes back - accept or decline.

If YOU don't know which lenders accept shared equity business and what level of deposit is required the trial and error is going to result in you doing an awful lot of work and having a lot of credit searches.

Did you disclose the default to your broker before the Halifax application?

I regularly say it until I'm blue in the face, but the first thing to do, before anything else, is get your statutory files from ALL THREE credit reference agencies. Check the information on them in conjunction with a broker and you can then identify issues which require amendment. Experian and its daft 999 nonsense is a blind alley. Its numbers give no indication of how a lender will respond to the data you submit on an application.

leedjmeldrum

Thanks. Prior to applying for the mortgage we raised the issues we had with the mortgage broker. He did say that a default with the current mortgage could prevent any lenders going near us.

I was hoping that a broker would be able to provide a good, strong indication as to whether or not we would be accepted for a mortgage given all the circumstances including the deposit we have available etc.
Family are now willing to take equity out on their houses to assist us with a larger deposit but whether we get accepted is another thing!? I'm panicking about the amount of attempts at getting a mortgage and this further damaging my credit score.

Unsure what to do...9 days left before we miss out on the house

leveller2911

Barny1979 wrote: »

Out of interest how come an affordable housing scheme is available for a property of £250k value? Is it for a large family?

I agree totally, it seems they will do anything to keep prices high. Its laughable really when you think about it , an "affordable" house being £250,000 ,thats around 10x average salary and thats shocking.

The Government needs to stop propping up the housing market and let it find its true level..

I wish the OP luck but IMO they may find out its best in the long term if they miss out on this one, lucky escape maybe.

lokipoki

Hi, was in exactly (almost) same position and turned to a Scottish credit union. They accepted me and my house sale will be complete soon.