Is this possible?

hopefulman

Hi I'm after some help. I am looking at purchasing a new build property for £265,000. I will have a 5% deposit and am looking for a 30 year term I am 36 years old. I am employed with earnings of £60k a year. I have one credit card with the balance paid off each month.


I had an excellent credit score however upon looking into mortgages I got a copy of my Experian report and it shows I have just in August this year had a default registered from a credit card with the date of the default being June 2009! This has reduced my credit score to 888 and "good"


Whilst I am obviously looking into this default would it still be possible to get the mortgage required as even if this default is correct am I right to think it will drop off in 6 months?

ethank

There are not many lenders that will provide 95% LTV loans on a new build. Most lenders will top out at 85% or 90% maximum LTV for a new build. A lender is likely to want to take very little risk at 95% so this default could matter.

You will not be able to reserve a new build property until you are in a position to proceed - so if you can't get the mortgage you need or the right level of deposit to exchange, then you will not be able to reserve the property right now. Can you get you hands on another 5% deposit? Will you be looking to purchase through the Help to Buy scheme?

Ignore what the Experian reports say about numbers and ratings. This data is not received by the lender. The lender gets the raw data about you and comes up with their own score. The score that Experian give you is just their own opinion!

Data from June 2009 will not be visible in July 2015.

hopefulman

Yes I could probably get up to 10% at a stretch the property I am looking at won't be built until June next year.

dimbo61

£265,000 is just £15,000 over the 1% stamp duty limit so the builders are being stupid to think buyers are going to pay this price and nearly £10,000 in stamp duty.(3%)
Most people will offer £250K MAX and only pay £2,500 in stamp duty.
95% LTV on a new build could leave you in Negative equity for years and you are looking at a 30year term so pay little off in the first few years.

ethank

hopefulman wrote: »

Yes I could probably get up to 10% at a stretch the property I am looking at won't be built until June next year.

You will need 10% to exchange contracts - which most housebuilders want you to do within 28 days of reservation.

ethank

dimbo61 wrote: »

£265,000 is just £15,000 over the 1% stamp duty limit so the builders are being stupid to think buyers are going to pay this price and nearly £10,000 in stamp duty.(3%)
Most people will offer £250K MAX and only pay £2,500 in stamp duty.
95% LTV on a new build could leave you in Negative equity for years and you are looking at a 30year term so pay little off in the first few years.

I agree - A sale price of £265k is likely to be a sale at £250k. I know on our development - they are being real pushy on price - there are 4 buyers for each home at the moment! I would still try 250k!

hopefulman

Thanks for the advice on price I will take that on board. The question I still need help on though is there lenders that would look at the mortgage for me with at best a 10% deposit? would any mortgage companies who look at the new build scheme entertain this?

ethank

You best bet really is to speak with a whole of market mortgage broker. How much is the default for and what were the circumstances?

hopefulman

Does anyone have any broker recommendations? I have written to the company lowells who have registered the default for details of what it is for. As I said it has only just gone on my my credit history but from over 5 years ago it says it is £1800 I could pay it off now but not until I know what its for and if it is even something of mine?

hopefulman

Any brokers on here think this is possible?