100% mortgage with 1 unsatisfied £400 default from 2001.

wigwam_salesman

As the title says. A friend and I are looking for a joint 100% mortgage of £135k.

His credit is excellent and I have one unsatisfied default of £400 from 2001 - I can't satisfy is as I have no idea who the collection agency it is registered with is.

Who will give us a mortgage? I can't imagine this is really much of an issue as it is such a small amount and so long ago?

wigwam_salesman

Anyone got any ideas?

wigwam_salesman

We have a broker and he is going to approach a load of companies today to find out what is worth applying for. I was just hoping for a second opinion.

wigwam_salesman

Well Northern Rock have accepted us at 6.29% fixed for three or five years and we can have either a 25 or 30 year term. Going in to the brokers tomorrow to finalise. Does that sound about right?

HelpWhereIcan

Obviously all depends on a number of things as well as the default such as your joint income and any credit commitments.

There will be a good chance that the default will drop off your credit file once it is 6 years old and there are lenders who will do 100% even with it there, so I would not expect it to cause you massive issues.

As for the competitiveness of the rate:

N Rock are OK, main advantage is the amount they will lend, they are very flexible with unlimited overpayments, underpayments, payment sholidays etc; and they do not charge a higher lending charge which could be £2000 - £3000 on a £130k mortgage. Also have help with costs cash back whihc can be useful and offset the fact that their arrangement and valuation fees can be terrifying.

Rate is there or thereabouts but where they are strong is the total amount payable over, say, the 3 & 5 years which is more down to the lack of a higher lending fee and the cashback, but is, afterall, one of the most important things (total payable over the term of the deal).

There are deals with a lower rate that would cost less over the 3 or 5 years - some of them require that you are a graduate or working in a named profession, whereas others may not be willing to lend the amount you require on your incomes. I don't know

You may want to ask whether going for their 6.49% deal with no arrangement fee (saving 995) might cost you less over the 3 or 5 years with a monthly diference of only £16 (based on a 25 year repayment). But it really depends whether total payable over the term of the deal or monthly payment are most important to you.

The point that I am making is that we do not have enough info about you to do a direct comparision, but make sure you ask your adviser to show you his research and ask what basis he has chosen that particular N Rock deal for you on.