Advise please on default - Update and success!!

plumfin

Hi all, hope someone can advise. I am about to apply for a mortgage - we had a horrendous couple of years in 2011/12, racked up some arrangements to pay, and some late payments. However, apart from a stupid underpayment of £5 on a card last year in Jan and Feb, I am now clear for almost 12 months. Everything is up to date, well within credit limits (unsecured debt is around £12k). We have been daft, but coming out the other side and I want to move on. I wanted to apply for a £125Kvalue house with my husband, with a 10% deposit. However, just checked his file and he has somehow gotten a default without me knowing.

So, I will need to apply on my own. The amount is within my means, my income is £35K per annum, but I am dealing with London and Country who are now closed for the weekend. Can anyone advise if they think this is a lost cause? Many thanks, Kelly

GMS

How much was the default for and when?

Is husband providing any of the deposit?

'have you checked affordability on your own with the proposed lender?

plumfin

We checked on noddle and it said that he had a D against his name for the last 12 months, that it originally defaulted in Aug 2011, I think, for £3800. We did an agreement in principal earlier today but no credit checks, based on my salary of £35K and the debts in my name, and his salary of £15K. We were agreed mortgage affordability of up to £180K

Deposit is in our bank, but it is coming from me
thanks

GMS

Agreement in Principle with which lender? Or was it a waste of paper L&C one?

You need to have checked affordability with the proposed lender as you have 12k of debts, a husband who will be classed as a dependant and a salary reduced for mortgage calculations by the debts.

The poor account conduct in the past will not help either.

plumfin

Thanks for the reply. Yes, it was a L&C one and I did ask if it was a credit check agreement, or just an affordability one. I would have preferred to get the formal agreement (although I accept this can change when you make the formal application).

I checked the Halifax and Nationwide websites and it said I could borrow between £117000 and £128000, but I appreciate this is on a good credit score - I am average acc to Equifax.

If I apply for a mortgage in my name only, can I take my partner's earnings into account as other income?

Thanks v much for the advice so far

K

GMS

If the mortgage is in your name only then you can't use your partners income.

Are L&C aware of the default?

plumfin

Yes, I advised them I now need to apply in my name only. I used L&C as they come recommended, but I am not really sure if I would be better with a local person I can sit down with - what are your thoughts?

GMS

If you are happy with L&C then stick with them but they are not too keen on complex cases. They prefer the vanilla cases.

It will not be straight forward and will require a lot of research.

plumfin

Hi GMS. I applied to Halifax through a broker and was approved for a 65% mortgage. There is no way I can find £35K deposit for a good 5 years. However, I also applied for a DIP with Nationwide and was referred to the decision dept, who want my bank statements and payslips. Both no problem at all, but is this a good sign or not do you think?

I also read that the Skipton and Dudley Building Societies are more lenient, is that still the case?

thanks
K

plumfin

Hi all, a quick update if it helps anyone. I went back to the broker I talked a to a few years ago, who had advised me to wait to clear some adverse credit. She advised that we still need to go with a slightly sub prime lender, Kensington, who approved us in principle for up to £160K with 15% deposit. She tells me that their DIP is cast iron, so I hope she is right.

Rate for comparison is 5.5%, so higher than hoped, but it is for just 2 years and then we can re-evaluate. Free valuation too. The key point was that they took both incomes into account and my husband had a default for £3500 in July 2011.

I know these numbers may seem high, but yesterday I had resigned myself to renting for the next 4 years, so I am over the moon!