Which Banks/Building society would be best for me? Default on its last legs...

Grangey.

Hi all,

So as the title may suggest Im looking for a little insight as Im keen to buy a place pretty sharpish and think I've found one that I like.

My question is simple, I have a default for £169 which is 5.5 years old (due to be removed march 2013), otherwise my credit history in recent years is fine. I currently pay more for rent than what I would qualify for mortgage wise anywhere so I know affordibility isnt an issue....so my question stems from the fact that I know some lenders are pickier than others, and some will overlook some things.

So given I only have 6 months left on my default and its such a low amount- I wondered if anyone can recommend which banks/BS are likely ignore this and proceed with an application?

I've spoken to Halifax and got an agreement in principle however they would only lend to me on an 85%LTV basis (although this was based on "max loan amount" rather than a specific property), but due to house prices around here (Oxfordshire) being far from cheap, I'm looking for 90%LTV.


Any thoughts? I've heard Halifax are normally on the more liniant side of things... but clearly not lenient enough for me yet (or maybe they would offer 90% if I was asking for a specific lower amount?), are there any other banks I should focus on when looking around at deals? Would I be more likely to secure a mortgage with a Building Society assuming they're a little less "computer says no" than Banks?

Thanks for any advice in advance

Grangey

Dave_Ham

Hi Grangey,

You are correct Halifax are the most flexible of the high street banks.

There may be ways to optimise the Halifax, as they do accept other forms of income and maybe switch from single to joint or vice versa if applicable.

Alternatively, at 90% many of the Building Societies will not allow adverse although some may be more accomodating given the dates - so long as you have settled it - which sure you have

I would put this in front of an experienced broker, as you may pay a fee but this will be hard to broker yourself given the Halifax position and they usually lend the highest income multiples...

All the best

handytips

1. Is the default satisfied ? If yes..There are options.
2. With any kind of bad credit, present or past at 90% ltv you will be a low scoring client which will affect your affordability calculations, eg low score 3 x income, medium 4 x income, high upto 5 x income.
There are many factors to be considered and the question has to be asked why didnt you settle the default.

Grangey.

Hi Handytips, sorry I just saw your reply.

Yes the default was settled the same month it was given so there should be no problem at all there, and like I say it was for a pittiful amount.




So ive been looking at properties and Ive found one I really like, but unsurprisingly I will certainly need a 90% LTV.

I spoke to Halifax and it does sound like their systems are locked to a "computer says no" approach, so by simply honestly answering that I have a default it switches to a max 85% ltv (it doesn't even ask for the default amount or legth of time ive had it)- although with 85% they will give me a VERY high multiplier (far more than I need to borrow). I dont think they will allow me to speak to an underwriter (who Ive no doubt on reviewing my situation would see I am a low risk applicant in reality), so I think I need to look for another place for lending.

Can anyone make a suggestion on a more "flexible" lender or the best whole of market broker that can give me genuine input into this? In an ideal world I could speak with an underwriter before going through a full application and give them an overview of the situation and see what they say..

Thanks
Grangey

GMS

Best to speak to a broker. Much better than trying to trawl around for lenders yourself.

If you do decide to go it alone you should look at 89.9% rather than 90%. Sounds mad but it is under 90% so often has a lower credit score pass. For the sake of a few quid it is worth keeping in mind.

Broker would save the legwork though.

Dave_Ham

Rather than looking for a bank or building society, I would be looking for a broker to achieve this for you.

There will be options, although given the limited information provided no informed broker is going to say go to x bank as too much like advice.

If you spend hours reading this forum you may find the answer for yourself.

May be worthwhile you getting your Experian, Equifax and Call Credit reports in advance though.

Best of luck

Grangey.

Thanks Dave,

I am tempted to get the reports as you suggest, but I thought having those sort of searches done could potentially be damaging so close wanting to apply for a mortgage?

Im happy to provide whatever information needed if it helps give me more direction so apologies if I've been veige!

Dave_Ham

The reports will help and not disadvantage your credit score/file.

Was not saying not information on post, moreover without a full, personalised fact find we cannot be seen to recommend a lender as without full disclosure it may be inappropriate for another reason.