First time mortgage problem

Firsttime54

Can anyone give me some help please?

myself and my fiancee have found a house and managed to get them down to £10,000 below market value. We have started the mortgage process with First Direct (part of HSBC). After a weeks wait from sending over our details I phoned and they have informed me that we have been declined because they have been told of some adverse credit by Experian. We have looked into it and there seems be a default on my account from 3 years ago from a dispute with o2 regarding a £40 bill when i tried to cancel the contract. I have spoken to o2 and am in the proccess of trying to get the default removed. HOWEVER, I have spoken to first direct and they have said that we can not get approval for their current account(which you need to have their mortgage) whilst i have this on my record!! The mortgage is with a 10% deposit on a £125,000 house, our joint earnings are £46,000 + bonuses of an extra £8000. We have squeky clean credit other than the one default and have zero outstanding debts and outgoings of £200 per month between us and our mortgage with them would be £540 per month! There is the possibility of the seller taking the offer away if we dont get moving quickly. I have driven 2 hours to hand them my credit report in full as well as a cover letter to see if the higher management can do anything regarding the situation.

Any idea what we can do?!

Thanks in advance :money:

kingstreet

Firsttime54 wrote: »

Can anyone give me some help please?

myself and my fiancee have found a house and managed to get them down to £10,000 below market value. We have started the mortgage process with First Direct (part of HSBC). After a weeks wait from sending over our details I phoned and they have informed me that we have been declined because they have been told of some adverse credit by Experian. We have looked into it and there seems be a default on my account from 3 years ago from a dispute with o2 regarding a £40 bill when i tried to cancel the contract. I have spoken to o2 and am in the proccess of trying to get the default removed. HOWEVER, I have spoken to first direct and they have said that we can not get approval for their current account(which you need to have their mortgage) whilst i have this on my record!! The mortgage is with a 10% deposit on a £125,000 house, our joint earnings are £46,000 + bonuses of an extra £8000. We have squeky clean credit other than the one default and have zero outstanding debts and outgoings of £200 per month between us and our mortgage with them would be £540 per month! There is the possibility of the seller taking the offer away if we dont get moving quickly. I have driven 2 hours to hand them my credit report in full as well as a cover letter to see if the higher management can do anything regarding the situation.

Any idea what we can do?!

Thanks in advance :money:

Where did you spent two hours driving to and who have you given your credit report to? Why?

You have a default. Unless you can somehow prove it was incorrectly recorded and have it removed, you're going to have to find a lender willing to accept you with it.

Firsttime54

Just to add to it, it seems when looking at my experian that they have chacked my file 4 times!!! is this normal?!

kingstreet

Firsttime54 wrote: »

Just to add to it, it seems when looking at my experian that they have chacked my file 4 times!!! is this normal?!

How many addresses in the last six years?

Firsttime54

kingstreet wrote: »

Where did you spent two hours driving to and who have you given your credit report to? Why?

You have a default. Unless you can somehow prove it was incorrectly recorded and have it removed, you're going to have to find a lender willing to accept you with it.

Is this even likely with a 10% deposit? I was told when i rang that if i posted the full report to them they may look at the entire report and glaze over the default, but with a bank holiday till wednesday and them working from monday i wanted to get it too them asap.

Firsttime54

kingstreet wrote: »

How many addresses in the last six years?

Lived in the same address for the last 11 years

Gentoo365

Maybe you should look at getting the mortgage elsewhere?

First Direct are pretty tight on 'conduct' so I would probably have supplied them with 3-6 months of bank statements showing that you can manage your money. It is up to them if they can be bothered looking though them.

You may get accepted though, however it will not be quick.

Don't worry about bank holiday and timescales etc. Everyone is affected so it's not as if anyone else can overtake you. If you want to progress things then get a conveyancer/solicitor and get yours to request the contract pack etc. from the vendors. That way the vendor knows that something is going on and the estate agent will take the property off the market.

Gentoo365

Firsttime54 wrote: »

Just to add to it, it seems when looking at my experian that they have chacked my file 4 times!!! is this normal?!

Well you have done the following:

1) Asked for an agreement in principle
2) Taken the request to a full application
3) Applied for a current account
4) Been referred to underwriting to review your decline

There is a technicality in the data protection act that means that everyone has a right for all decline decisions to be reviewed by a human.

Sometimes the initial automated check happens at Experian's end. So it is just a response rather than any detail. If the automated decision process referred you then the human may have ran another check to get the actual details.

Firsttime54

Thanks for the advice guys.

By the sound of it First direct first consider you for the current account and then the mortgage. So we are yet to get past the initial stage. I have been told that one of the management team will look into this. We sent over 3 months bank statements, 3 months wage slips and our p60's

Which bank's are more likely to look at the situation more favourably? any ideas?

Thanks again guys

GMS

90% mortgages are difficult to obtain, even more so with adverse credit. If FD will not approve you for a current account then you look to have no chance with a mortgage.

May be worth you speaking to a broker. Don't apply at random to lenders as your credit score will be lowered further.

Good luck

Firsttime54

Thanks for the advice, I would of thought that with it being a default 3 years old of only £40 and having otherwise glistening records, more than affordable, no commitments and no outstanding debts that surely it wouldnt of caused a hassle.

Will keep you all updated on our progress