Defaults and mortgage?

mancbarry

Hi all this is my situation.
I have recently applied for a mortgage which has been declined. The reason being I have 2 defaults from 2 years ago on my credit file both from British Gas for small amounts £117 £159. The defaults were from a shared house I lived in for 1 year and although are in my name were left for another flat meet to clear when we left! He now lives in Australia and left soon after we left the house! My fault I know but I really was unaware.
The first I knew about the defaults was when I did a full credit report, now I have had no contact from BG about the debt and the default was issued after I left the property. Do I have any chance of getting them removed?
If not what is my best way of building up my credit? Should I rent for a year or 2 and make sure everything is 100% and try again? Or do I have no chance until they are removed in about 4/5 years?
I would really appreciate some advice.
Thanks

ACG

Call British Gas and pay them off. They should be able to find your account even if it means they have to pull their finger out.

I was at a meeting last week with some "adverse" lenders, basically mortgage companies who would consider lending to people that have the odd default if its from a while back or a less than perfect history. Those lenders only deal with brokers.

Without seeing a credit file etc its impossible to say whether or not they would accept you, but its certainly a possiblity, id be surprised if any of the high street lenders would.

It might be worth getting in contact with a mortgage advisor and seeing if they can find anything for you.

mancbarry

Hi I have a good broker who is trying to help me out, I may have been a bit unclear in my previous post, I lived in the house aprox 2 years ago but the defaults were issued later just over a year ago.
Because there is 2 of them and they are so new the broker says there aren't many options without paying very high interest rates.
Thanks for your reply.

Dave_Ham

Whats interesting is that you have either had no credit in the last 2 years (as unlikely to be accepted), or not all of the credit reporting agencies have connected you to this old address..

Either way, as ACG said get yourself to a decent mortgage broker who is likely to be able to help once party to full disclosure.

Good luck..

ACG

You will pay a higher rate, nothing to extortionate though.

Who did you broker make an application with?
What is the loan to value? (ie purchase price and deposit?)

mancbarry

Hi I dont think the credit agencies did link me as I have other credit cards form the last 2 years which are all fine.

I have a 15% deposit at the moment, think the broker has tried Nationwide first then after the discovery a few others but waiting to hear back from them.

Do you think if a mortgage isnt possible now, a good plan would be to rent for a year and build up a 20 or 25% deposit?

Dave_Ham

Not sure the broker is doing you any favours on the face of it.

Get the copies of the 3 main credit agencies, give this information to the broker and I would expect him to come up with a better solution.

ACG

I agree with Dave, Nationwide probably wasnt the best option but if they wernt aware of the defaults at the time that can be forgiven.

Just ensure theyre not applying to everyone in the hope someone will say yes. Get them to research first, their are certain companies i would be going to first so i knew there was an option (these are the companies who are most lenient in your situation), if they say no then you know you have no chance. Id then be trying to find something with a better rate if they were not that competative, but atleast then you would have an option.

15% deposit should be ok, its the minimum i would be looking at but there should be options available to you which even with a higher rate should be cheper than renting.

mancbarry

Thanks for the reply's guys, do you think i should search google for mortgages with bad credit and try pick a decent one or can someone point me in the right direction of a good broker?

GMS

Of course you can google it but as has been said the type of lenders who deal with adverse are through brokers only. If you goog le it be careful of websites stating 'guaranteed mortgage' or similar. There is no such thing.

As brokers we are not allowed to recommend any services but a member of the public can.

Where are you located? This may help somebody recommend.

Good luck

[Deleted User]

Does anyone have the answer yet as I am also in this situation, I just don't have defaults but quite a few late payments, already have a mortgage with Halifax? Am I in the same boat? Thanks :-)