Dumb and dumber - mortgage/credit file questions

avizandum_2

Will try to cut a long story short..

I got behind in my mortgage payments a few years back. I had left my job to retrain as a lawyer and when I finally graduated in 2010 I could not find employment for almost 1.5 years and during that 1.5 years I got behind in all my payments to creditors (NatWest professional loans/credit cards and mortgage).

I always paid something to each creditor, but less than original repayment amounts and sometimes late. I was in constant contact with creditors throughout.

Since I found employment I have been conscientiously paying back creditors each month. I paid my mortgage arrears off finally in June this year and have made overpayments since then.

My salary now is good and I have decided that I want to sell my place to buy another place. I spoke with Halifax/BoS today. I asked them whether my previous arrears would be prohibitive to a future mortgage application. The lady said that in her experience since I had been in arrears and had made partial payments I would have a 'default' registered against me which would remain on my credit file for 6 years and I should not be hopeful about being accepted for a mortgage.

I am financially illiterate, so if anyone can help with these questions I would really appreciate this.

What is a default? and is a default registered against anyone who makes late/lower payments?

I have been looking at my credit file today (for the 1st time) and although there are some late payments showing from a couple of years back and one payment arrangement, I cannot see 'default' mentioned - how does a default show on your credit file?

Is the Halifax lady correct, that I am unlikely to get a mortgage (high street one) if I have had a history like mine?

Sorry if the questions seem dumb and thanks for reading

Dave_Ham

Firstly, there are 3 credit reference agencies; Experian (Credit Expert) Equifax and Call Credit. You need to assess what each of them have on your credit file.

There will be sections on each that say date defaulted, if there is no date then it has not defaulted.

That said, an Arrangement To Pay usually means a default is registered.

Get all 3 credit files and send to a broker would be my suggestion..

If you have a 15% deposit and historical defaults/mortgage arrears, then you can pretty much achieve high street rates other things being equal.

avizandum_2

Thanks Dave, really appreciate your advice.

Just went into file to dig deeper, and BoS (personal loan - not mortgage) have registered a default.. Gutted about that. (They always got some level of payment and I always communicated with them - I did the same with others and they have not registered a default..)

Back to the mortgage... So I should show all my credit files to a broker then they'll do the leg work finding a mortgage?

How would I find a reputable broker or are they all much of a muchness?

Also when I sell my place I should be left with approx. £70K in my hand after paying solicitors fees. Should I shove that all down as a deposit or try and wipe out some debts and put less down as a deposit. (If the defaults are on for 6 years then I'm screwed to a certain degree anyway)

Thanks

Dave_Ham

What date was the default dated and just the one on there?

Being honest, they should have all defaulted you as you did not stick to the original payment agreement.

That said, do check all of the credit files as they may well hold different information.

Yeah, I would get the files and then let a broker do the work assessing the options.

Whether to put all down as a deposit or clear debts is dependent upon your income, debt level, loan to value and will only be clear once someone qualified has run through your situation in detail.

Best of luck