Mortgage declined due to default in credit report

amyle3012

My husband and I decided to take a mortgage back in Feb 2013 and we were offered by NatWest. My husband works and I don't, therefore he was applying for the mortgage alone base on his income. However the house buying chain was broken several times and now the Mortgage offer expired after 6 months.
We've just applied for the same mortgage deal and got declined because of a default in my husband's credit report. This did not appear before when we first had the credit checked first time in Feb 2013. It's been put in by a company named 'Cabot Finance' and this was due to a debt my husband had when he was younger. After this terrifying incident we called Cabot Finance and paid them the full amount. The mortgage dealer we have been using since the beginning refuse to continue helping us with the application because she thinks we cannot get anything immediately at this point.

After looking at all possibilities we now left with 2 choices:

-OPTION 1: Go with a mortgage dealer who charges us £2500 to get a loan from an individual company called Kensington Mortgage Company Ltd at a higher rate (around 3.4%). Because they're individual they can accept that there's a default in my husband's credit report.
-OPTION 2: Give up on the house we want and wait for few months until the credit report improves and see what happens.

We really like that house we're buying. And also at the moment we're paying rent about £525 per month. But £2500 for the mortgage broker is a little too much. Therefore we need your expert opinions on this matter, to help us decide whether or not to go with Kensington Mortgage which accept our bad credit history.

Thank you for your opinions !

Thrugelmir

How much was the default for?

amyle3012

Thrugelmir wrote: »

How much was the default for?

The original debt was £700 plus other fee and we paid the finance company nearly £900.

amyle3012

And the default dated 2010.

amnblog

Kensington will probably do this (as may other lenders) for you and you will need to use a broker. £2,500 in broker fees is far too much (over three times what we would expect to be paid).

GMS

Kensington are a specialist mortgage lender dealing with historical adverse credit clients.

They do not dictate the broker fee, the broker does so you could still use them through another broker.

I think the broker fee is too high but that's something for you to agree with the broker.

Rate wise you do not have the pick of the market to compare it to. You will not get market leading rates due to the default.

The default will remain on file until 2016 so consider what term of rate you want. Look at the follow on rates. If you fixed the rate until beyond the default coming off then at least you would know what your payments will be whilst waiting for credit file to clear.

Confuzed.com

Hi,

Me and partner are currently in the process of a mortgage application with Natwest. I have default from 2009 on my credit file. Our mortgage broker checked with Natwest first before applying because we had already been refused by Barclays (it took Barclays two months for them to tell us, to the point where they gave us compensation for our wasted time).

Our mortgage broker has Natwest's confirmation in writing that they were happy to accept the mortgage application with my default of £2000.

Does your husband bank with Natwest by any chance?

If we get declined on this again when we have been through so much already, I will be furious. Our house purchase is the near the end now and all we need is a Mortgage Offer.

We should know Friday.

Thrugelmir

amyle3012 wrote: »

And the default dated 2010.

Settled in 2013 though. Which is the issue.

Confuzed.com

Thrugelmir wrote: »

Settled in 2013 though. Which is the issue.

Yes I agree. Mine was settled back in 2009/2010 so probably why they aint too concerned about my application. Plus my partner has a glowing credit history too. Fingers crossed we get a good result on Friday.

kingstreet

What is visible on ALL THREE versions of your credit file?

If you have not got them all, do so immediately. Put them in front of a good whole market broker. A default more than three years old may be placed at high street rates and if it doesn't show on all three credit files, there may be more options, as many lenders take information from only one.

£2 paper copies are fine. Do not pay for subscriptions, nor "scores."

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/order.ehtml?prod_cd=UKSCR

Experian

http://www.experian.co.uk/consumer/statutory-report.html#orderReport

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=basket_add&tpl=setRegister&package=63&amount=1&mode=clear

Shop around for a broker. £2,500 broker fee is ridiculous for your situation.

dancingfairy

Is the default date correct? You want to make sure it is at aleast correct.
df