Mortgage and bad credit....another case!

jennlx

My husband and myself want to buy a house - we're old first time buyers (both late 30s). My husband had a loan with the Abbey which he defaulted on, and was subsequently paying off to a debt collector. After paying off 2/3rd of the loan, in 2009 he was made redundant and they were getting aggressive so he sought debt advice and was told to ask for original agreement which the debt collector could not provide and closed their books. The Abbey subsequently sold off debt to another agency and ditto above. I must admit we both forgot about it, until recently we received a letter from a debt agency telling him to call them - no mention of the debt, but we presume this is what they are fishing for.

We want to apply for a mortgage so what's our best bet? This loan is nowhere on my husband's credit reports but as his last payment was in 2009, it's lurking somewhere no doubt. Do we contact this agency and try and agree a settlement to put it to bed? Would the mortgage company even be able to see if it's paid or unpaid? Do we just declare all to the mortgage broker and get their advice? Hanging fire on the mortgage isn't really an option for us - my husband is almost 40 so the chance of buying ever is getting slimmer and slimmer....

Thanks for your help!

samtoby

Have you checked all Credit reports; Noddle (was call credit) Experian and Equifax some credit does not get reported to one but may on another?

Dave_Ham

Sam is correct; worth checking all 3 credit agencies.

Aside from this you cannot beat a decent broker in these situations as they will be aware of what you can and cannot get and which lenders will view this (or not) in which way.

As a first pointer, lots of this will be subject to your income, employment and importantly deposit and purchase price (loan to value)

Obviously with a 20% deposit, the world is an easier place than with a 10% deposit.

jennlx

Thanks for your responses - I have contacted London & Country and they seem decent. Do they have an Ok reputation?

The_J

As with all companies it depends on which advisor you get, you could get a new guy who doesn't have a clue (not necessarily a bad thing as they will do a thorough job) or you may get someone with a decade's experience.

With a one man band their continued existence is often a good sign...

samtoby

I personally would say it may be better with someone who specialises in adverse credit; but that of course is in my opinion.

ALIBOBSY

If the date he defaulted was more than 6 years ago it drops off the credit report, but it isn't classed as statute barred for court purposes until 6 years after the last payment or written acknowledgement of the debt by the debtor.

So it maybe that the default meant the debt dropped off the report so it won't effect any applications, but the debt collectors can keep asking for the money till its statute barred-and you can keep sending them the same letters as before ie provide the agreement or no payment, or if you just want rid make a very low F & F.

Other posters are right though first things first get all you credit files for both of you and check everything on them.

One thing to be aware of is debt collectors can and do lie to the credit ref agencies about the date of default and often try to put it onagain with their name and a default date as the date they bought the debt, this is completely wrong and not allowed so watch for it and challenge it if they try. TBH seems to haoppen less now people are more aware of their little tricks.

Good luck with the mortgage.

Ali x