Getting a mortgage

donnylisa88

I will apolgise if this post is in the wrong place.

But I just need some advice.

Me and my husband are currently renting and looking at buying our first home. We have been giving his mum £100 a month to pay an outstanding debt, and until last week we thought she was paying it, but turns out she hasnt and he has 'defaulted' on it. We have managed to get in touch with them and they said we can 'partially settle' the account and the rest will be written off. It is a tempting offer, but not sure how we will stand with getting a mortgage.
He has one credit agreement on his file but currently paying this off, so his credit score is above average as he has not had an recent credit and not using much of his credit.
When we apply for a mortgage, how will it affect getting one? For the last 3 years since we have been together we have paid bills in full on time, and my credit report is fully satisfactory. Will they look at the last few years and assess us on 3 years good financial behaviour.

Hope someone can help

Dave_Ham

Bad news here, it will severely affect your mortgage application if you settle, partially settle or do nothing...

Its so current that it will be difficult to mitigate in the short term, good luck

donnylisa88

Sorry for sounding silly, but what does that mean? Will we get turned down for a mortgage if we applying based on that default? The account defaulted in may 2009 if that means anything

ACG

How much is the default for?
when was the default registered?

Every lender has an issue with defaults. A lot will not accept any within the last 12, 24 or 36 months or even more.

ACG

just seen your last post.

Get it settled! If you have a credit card use it and pay it off, if you dont probably best to get one (if you have no other forms of credit on your file). Leave it for 3-6 months and then get a copy of your credit file. From then on you might have a half decent chance of getting a mortgage, although it wont be the best rate available.

Dave_Ham

Sorry yes a big issue getting accepted whilst using OH name on application. You will need at least 12 months once settled before getting a mortgage in joint names..

donnylisa88

ACG wrote: »

How much is the default for?
when was the default registered?

Every lender has an issue with defaults. A lot will not accept any within the last 12, 24 or 36 months or even more.

Over 6,000 and defaulted in may 2009. They have said we can pay 1500 and the debt will be partially settled, but after speaking to the debt advice line, they told me I may be able to get it fully settled, so ringing them in the morning

donnylisa88

Dave_Ham wrote: »

Sorry yes a big issue getting accepted whilst using OH name on application. You will need at least 12 months once settled before getting a mortgage in joint names..

Could I apply for a mortgage as a single person but use OH wages as income? Or would he still need credit scoring? Sorry for asking, jut trying to get my head round it

donnylisa88

ACG wrote: »

just seen your last post.

Get it settled! If you have a credit card use it and pay it off, if you dont probably best to get one (if you have no other forms of credit on your file). Leave it for 3-6 months and then get a copy of your credit file. From then on you might have a half decent chance of getting a mortgage, although it wont be the best rate available.

I am going to try and get it settled tomorrow. I have a good credit history so hoping that will help. We have been told by a bank that just on his wages, we could get a 95% mortgage at 6.19% and he seemed positive cause we are up to date on every other bill, but we didnt mention the default

Dave_Ham

No worries..

Unfortunately you cannot use his income if not on the application. If he works hard on his credit file, you can improve your report quickly but unfortunately no magic wands...

Its a big amount and I assume it is to a bank, ensure you do not apply to that bank for starters...

donnylisa88

Dave_Ham wrote: »

No worries..

Unfortunately you cannot use his income if not on the application. If he works hard on his credit file, you can improve your report quickly but unfortunately no magic wands...

Its a big amount and I assume it is to a bank, ensure you do not apply to that bank for starters...

How can I improve his credit report quickly? I am ringing the debt collection agency tomorrow to see if they fully settle his account. Yeah the loan was with santander, but now with DLC, and we are thinking about applying to yorkshire bank. Its just frustrating, cause for the last 3 years he has been perfect with bills etc, and I do understand bank needs to trust who they are lending money to, but surely they can see hes changed