Default Advice- Should I wait?

manc

I've been saving to buy my first place over the past year and in the next couple of months should have enough for a 5% deposit. Had been looking at the various Help to Buy Schemes.

Checked my credit report (Experian) in March and all was well- Excellent rating but checked Equifax a few weeks ago and, while still showing up as being excellent, a default was on there from June 2008(£595-Settled in 2009). Was back when I was in a bit of a mess financially - and in unsecure work. Turned all that round over the past five years though- and now debt free with savings to boot. Had completely forgotten about this default - especially with it not showing up on Experian for some reason.


Anyway- just asking whether with this default I am likely to have any luck getting a mortgage? From what I've read it seems I'm unlikely to get a 95% Mortgage Guarantee one, but may be ok with an Equity Loan? Is this the case?

And would it be more likely for me to get either if I were to wait until June when six years have passed since the default?

ethank

You should definitely check in with a broker, and give them all of your reports. There are some lenders which do not check Equifax.

Are you looking to buy a newbuild or resale property? As Equity Loan can only be used on newbuild, and mortgage guarantee only on resale.

manc

Have been looking at New Build mainly at the moment as it seemed more likely I'd be able to get an Equity Loan than a Mortgage Guarantee.
I'm pretty sure the default is valid though - so it'll be picked up somewhere along the line. Would it be best to just wait until June when it's been 6 years?

However... on top of this...
I've just signed up to Noddle (posting on here earlier got me wondering how my files were looking currently - after the whole Default thing) and while Experian and Equifax had me at 'Excellent', this has given me a 1/5 rating saying I have an active CCJ from Feb 2008 for £800 which I knew nothing about until now!

As far as I was aware- all of the companies I'd had problems with back in 2008 I'd dealt with and paid all my debts. I have no idea where this one is from - and it didn't come up during previous Equifax/Experian searches.

I'm gutted.

I'm going to inquire as to where the CCJ is from via the court- and whether in fact it's actually valid ( I really have no idea).

How is this going to affect any chances I have now???
Will it drop off my credit report in Feb 2014 even it it's active? (and then be able to apply for a mortgage in June after the 6 years after the default have elapsed)
And if it turns out it's something I have completely overlooked (despite never having received any notification of it!) and I pay the amount due- would this then take it off my report or would it take yet another six years?

manc

Also, annoyingly, Noddle states that while the Default was served on the account in June 2008- it states that it was 'Satisfied' in April 2009.

Do they count the six years from the Default date or the date it was paid off/satisfied?

Experian_company_representative

CCJs and defaults drop off your credit report six years from, respectively, the judgment or default date. This is not affected by when they are repaid.

James has

Wh05apk

Given the age, you may be ok, if everything else is strong enough, all I would suggest is speak to a broker, explain the situation and attempt an agreement in principal, although at 95% it will be tight, failing that wait till june when it should drop off.

kingstreet

So you now have a visible default and court judgment?

Please obtain all three versions of your credit file and put them in front of a whole market broker who can see your position more clearly and suggest a course of action and timescale.

Wally85

Your situation is very similar to mine. I had a £295 (i think it was) default from a couple of years back but apart from that no other issues with credit. We had about 8% deposit and saw a house we liked so tried to go with the 5% help to buy mortgage and got rejected at the decision in principle stage. I mentioned the default to the broker and he said there was no way i would get a 5% help to buy mortgage with a default so He ran the me through the Halifax and Natwest decision in principle with a 10% deposit mortgage and i got accepted with both. At first I thought happy days must be all good then i looked online and noticed that the DIP doesnt always guarantee a mortgage... anyway after we had saved our 10% deposit and we went throught he whole application process, despite it taking about 5 weeks, and me having a bloody heart attack thinking we were going to be rejected, we got the mortgage no problems at all with Natwest. I didnt want to try Nationwide since i heard they were stricter but in hindsight we probably should have gave it a go.

Also on the online credit reports i was something like 980 with equifax and 1/5 with noddle so really take them with a pinch of salt.

Also strangely i cant even see a mortgage application credit check on my file apart from the one from the ones when i went for the DIP. So maybe Natwest do the full check at that stage rather than when you go to full application.

manc

Thanks for all the replies - I didn't sleep all night after finding out about the CCJ - but they have put my mind at ease a bit.

With regards to the CCJ - turns out it was issued to an address I no longer lived at, but I was still in touch with the creditor when I moved. In fact, I then paid off the debt in full in 2009 when I was finally getting my finances in order. However, even when I spoke to them and did this, they never mentioned the CCJ! And it turns out they sent the letter saying the debt had been satisfied to the old address despite me being in regular contact with them!

So I didn't know that once it had been paid I had to get a certificate of satisfaction and have it updated on my record...because I never knew it was there in the first place!

Anyway I'm getting this letter sent so I can take it to the court and have it updated to satisfied. And then it will drop off my credit report in six weeks time... Phew!!!


From the sounds of it - it may still be quite difficult to go down the 95% Mortgage Guarantee route...and all the Equity Loan schemes in the area I want to buy in (Manchester City Centre) are filling up or sold out now. So I think I may hang on until after the default has dropped off in June- by which time I'll also have saved a bit more which should help things