mortgage application / default - any options?

imanc

Hi,

I'm trying to get a mortgage for 75% of £105,000, and was provisionally accepted by Natwest, and I passed their credit check with no problems. There were other issues relating to self employment which have now been rectified, and my mortgage broker is going to try an alternative lender.

Anyway, I decided to look at my experian credit report in the meantime and lo and behold there is an unsettled default from Scottish Power to the tune of about £1100 from around May this year. At the time I tried to dispute the amount owed to SP as it seemed extortionate, and I was loathe to pay the bill. At the same time, I was in a rush to leave the property as I was heading off to do some travelling, and I guess I just buried my head in the sand.

Now I'm trying to purchase a house, I see my past actions or lack thereof are probably going to come back to haunt me.

It seems Scottish Power have only lodged the default with experian, but call credit and equifax are clear, and I suspect Nat West have not queried *experian.

What is the best course of action? Should I pay off the debt and perhaps get a notice of correction lodged with experian? Is there any way I can remedy the situation for if a potential lender does query experian (likely they will!)?

I'm assuming that despite a 25% deposit, a £1100 outstanding default, is going to be a complete show stopper re's getting a mortgage.

Advice greatly appreciated!

imanc

Dave_Ham

Very tricky, not impossible.

It amazes me that in the current climate mortgage brokers do not all get credit files upfront.

You have done the right thing getting the credit reports, a notice of correction will not help you at all. Lenders use an automated credit scoring system and a recent default will decline on most.

I would be asking your broker what lender they are going to now and why?

Given your deposit and loan to value %, I would be confident of finding a solution depending on what the self employed income issue was with Natwest?

imanc

I ran a ltd company for a few years, but decided to ditch it last year and resume trading as a sole trader doing exactly the same line of work, with no breaks - just trading under a different company. Apparently this has reduced the number of lenders willing to offer a mortgage.

So I have 2011 ltd company accounts, plus my accountant put together an interim P/L sheet for up to about Nov, but it wasn't showing enough profit. However, he amended it to include money taken in december and it is now apparently showing enough profit.

So the mortgage advisor is now looking to take the new sole trader interim accounts and pursue it with another lender.

imanc

PS. I take it just settling the debt will not greatly help the situation?

geoffken

Any reason WHY YOU SHOULD NOT SETTLE THE DEBT!
you went off "travelling" and ignored it.
you now want somebody to lend you £75,000.
What planet do you live on.

stclair

Natwest use Experian & Equifax for credit scoring.

imanc

geoffken - I didn't say anything about not settling the debt! I'm merely asking if doing so will aid an immediate mortgage application, or not. The last thing I want is for the default to become a CCJ.

Thrugelmir

imanc wrote: »

geoffken - I didn't say anything about not settling the debt! I'm merely asking if doing so will aid an immediate mortgage application, or not. The last thing I want is for the default to become a CCJ.

The longer the default remains unsettled it will continue to score against you and compound the problem. So best advice is to settle ASAP and move on. Whatever the consequences of your lack of action you'll just to adapt to them. As there's no way of turning the clock back.