Poor Credit History Mortgage Help Needed

Gateshead_Cockney

This is my first post although I am a long time browser of the site and any help/advice is most appreciated.

My wife and I have just been turned down for a Halifax mortgage due to my credit history.

Currently she has the mortgage on our flat as 3.5 years ago I couldn't get on the mortgage at the time. She has excellent credit history and score as a result.

I on the other hand do not. In the past I have defaulted on a bank account overdraft in 2006 (settled in full August 2009) and missed 4 payments on a credit card in 2006 (also settled in full August 2009). Since mid 2008 I have not missed a payment on anything and have never even ventured into my bank account overdraft. I currently have £0 on credit anywhere, no credit cards (all paid off), no store cards, no hire purchases or car finance etc. I have a monthly paid by direct debit mobile phone to the tune of £15 per month.

Ideally we would like to get a joint mortgage so we can sell the flat and buy a house. Our combined income is circa £46k (I also get bonus of circa £12k per annum) which is weighted towards myself.

Please can anyone offer some suggestions of where to turn with regards possibly getting a mortgage or is it the case that we will have to sit it out until my debts are over 5 years old since settlement dates?

Thank you.

kingstreet

What was the reason for the decline?

What's the loan to value?

Your default should have fallen off your credit file by now, so a credit card to help build some positive history would be helpful if you can wait long enough. Pay it off in full each month to avoid paying interest.

Gateshead_Cockney

The defaults are effectively off, but the last "comment" on them was August 2009 when they were paid off, so that is the date the adviser in the bank said their credit scoring had used, and then advised that I would have to wait 5 years from that date for them to drop off.

The value of the house is £180,000 ad the loan would have been £148,000.

ACG

How much is the purchase price?
How much are you wanting to borrow?

Who were the defaults with?

Gateshead_Cockney

Defaults were with Natwest Bank overdraft and MBNA Credit Card.

ACG

This should be possible to do, ive seen people with much worse situations gets a mortgage. If you speak to a broker they will be able to get this sorted for you.

Gateshead_Cockney

I know the two "main" questions to ask a broker as per Martin's advice, but ideally what else should I look out for?

Realistically could we get a mortgage for 3 years then when that is up return to more "standard" lenders when I should have more options?

GMS

Agree any fees at the outset. You do not have the pick of lenders so you need to rely on a broker to get the best deal possible for you.

Moving to a different lender after the adverse drops off and assuming all is kept up to date in the interim is a definite possibility. However criteria changes all the time so no guarantees.

Definitely a broker case this. Don't go applying at random to lenders as this will harm your credit score.

ACG

The rate you will get wont be shockingly bad. Your lucky in the sense that the govt are lending cheap money to banks so the rate you will get isnt actually that bad - it might look bad in comparison to the best rates available but in reality its not.

But yes, once you the defaults are further down the line or even dropped off, then its likely you will be able to get on the better rates that are available on that time (As GMS says, subject to whats happening in the market at that time).

Gateshead_Cockney

Thank you both for your help, most useful.

Thrugelmir

Overpay your current mortgage to boost your equity. Then you'll need to borrow less. Which may well improve your chances.