Likelihood of mortgage acceptance?

supermassive

Asking for my work colleague who's saving a deposit for a house, but she's waiting a while to look at her credit score, so told me to do it (she literally turned her head away from the screen).

1 default on a tesco mobile of £400 is outstanding since last year, but nothing else bad (she's on the electoral roll, but not according to call credit. She voted so I hope she is!). She's got British Gas on there for her gas and electricity, they're in green, and her 2 bank accounts are green, too.

She's on 14,800 PA I think.

She'd only need £50,000 for a house anyway.

Is she likely to be accepted with the one ongoing default or will it stump her chances until paid? And what after? Will it hinder her in the future if she does pay it off?

kingstreet

This will depend on deposit/loan to value.

95% - no chance until then default is at least three years old.

85% or less, there may be options.

supermassive

kingstreet wrote: »

This will depend on deposit/loan to value.

95% - no chance until then default is at least three years old.

85% or less, there may be options.

What if the default is paid off?

She was hoping to have 10% deposit with (obviously) 90% loan amount

kingstreet

The lenders who accept a case with a default will normally expect it to be say, under £500, satisfied and registered more than three years ago.

It being satisfied won't increase the chances of a higher LTV.

She needs to speak to an independent mortgage broker and give her overall position as well as this bit of information.

supermassive

Ok. She doesn't know about the default yet, but has approx 6k saved right now, so will probably opt to pay it off (I hope!)

Thrugelmir

supermassive wrote: »

1 default on a tesco mobile of £400 is outstanding since last year, but nothing else bad

Bad enough to hinder a mortgage application though. Precisely the reason that CRA's exist and have a market for their services.

jimjames

supermassive wrote: »

Ok. She doesn't know about the default yet, but has approx 6k saved right now, so will probably opt to pay it off (I hope!)

Why would you have £6k in savings yet not pay off a £400 outstanding debt? It makes no sense at all or is there some reason why she wants to keep it unpaid?