Do we stand any chance of getting a mortgage?

HoneyAndLemon

I have been looking at OH and mine's credit reports lately, as we want to apply for a mortgage next year. Mine is pretty much clean, no missed payments, late payments, on electoral roll at all addresses, not too many searches etc.

However my OH has a slight (well more than slight) blemish on his. He foolishly took out a loan in 2009 for his sister. She promised she was making payments, but unfortunately, wasn't. She stole letters being sent to him but he did eventually find out, and hounded her every month from then on, and it was settled in June 2011.

Now, the loan only appears on his equifax report. There are 8 separate months were late payments are recorded. No default was ever recorded, just late payments, and it is showing as settled.

How long are these likely to stop us getting a mortgage? He has had credit cards, which are paid in full every month since then, and we have a joint loan now which has a perfect repayment history.

Ideally we would like to apply for the Nationwide 95% LTV Save to buy mortgage, and are saving away at the minute, and will hopefully look to buy mid-late 2014, do we stand any chance?

Thanks

Thrugelmir

HoneyAndLemon wrote: »

Ideally we would like to apply for the Nationwide 95% LTV Save to buy mortgage, and are saving away at the minute, and will hopefully look to buy mid-late 2014, do we stand any chance?

Thanks

Try clear other credit commitments before applying. As at 95% LTV there'll be little allowance given.

Many positives from saving with a lender from whom you obtain the mortgage. Will go a long way to negating other historic blemishes. As the lender will have first hand experience to relate to.

Close down any credit cards which aren't required as well. One should be sufficient for emergency back up.

HoneyAndLemon

Thanks Thrugelmir.

We each have one credit card. Zero balance on both,if either does get used then its cleared in full.

The only committment we have is the loan. Which we thought about overpaying but we'd rather build up savings so as the money is there if we need it. If a lender said the balance on the loan would be a problem, it would be unlikely there would be much left from the savings for a deposit if we cleared it so we'll just have to deal with that at the time.

We have a joint current account with Nationwide which my wages go into, and bills come out of. No overdraft or anything, its used just as a bills account so they can see us managing money, and then a good balance building up in their Save to Buy account. Have a separate account with another bank for spending money/back up purposes etc.

So Im hoping we're making all the right moves, (thanks mostly to this site), but I just wonder if all efforts will be in vain with his credit history...

ACG

95% mortgage with a default 2 years ago - i do not really do many 95% mortgages but i think this will be very difficult to get through with any lender.

85% and it wouldnt be a problem but i think 95% is pushing it.

HoneyAndLemon

There was no default ever listed though. Once he found out what was happening he got in touch with the bank and they told him as long as he made a payment there and then they wouldnt issue a default, but would just record the late payments.

Are late payments slightly better than an actual default?

Dave_Ham

Late payments are far better than a default, although with a 95% loan to value product any adverse is a huge issue.

Not many lenders have an appetite at 95% loan to value, I think it would be advisable to do what you can to get 10% deposit and then you should be fine with no default.

HoneyAndLemon

Thanks DaveHam. I think that's probably the best plan, save enough for 10%, but we'll probably apply for the 5% in the hope we get it