Concerned I may not get a mortgage

gestion

My wife and I have found our dream first home. We are in the best financial situation we've ever been in. We have a household income of around £55,000 a year. No current credit commitments (everything has been paid off).

One point of concern is some defaults registered against me between January 2009 and November 2011.

There are seven in total. One dropping off this month. One in March. Another in May. One in March 2016.

The total value of these is below £2,000 and have all since been satisfied.

Based on affordability, we can easily afford the mortgage. We're currently renting at £600 per month. Mortgage examples we have seen so far have been around £800 a month (25 years); but in reality we could afford more.

I appreciate credit history is important for lenders, but a lot can change in 6 years.

We're going through a broker. What are the chances that we will find a lender who will actually take a common sense approach to considering our application? And basing it more on our current affordability rather than historical data?

Should hopefully begin progressing our application tomorrow but very apprehensive. Something which should be quite simple I feel is going to let us down badly _pale_

HappyMJ

I'd say your chance are very good. There are mortgage providers that will ignore old defaults especially if satisfied. Your broker will help you find them.

gestion

HappyMJ wrote: »

I'd say your chance are very good. There are mortgage providers that will ignore old defaults especially if satisfied. Your broker will help you find them.

That certainly is a relief

I should have probably added that we've been qualified for a Help to Buy equity loan too so technically speaking we'll be looking at a 75% mortgage, but at the same time I believe it's true that there are probably fewer lenders offering these mortgages so it may hinder our choice somewhat.

Aside from the defaults, we've worked so hard over the last couple of years to clear off our other commitments including an overdraft and credit card which although never saw any issues with payment, probably totalled over £3,000-£4,000 in balance. We now have a zero balance on everything, with most superfluous accounts closed. We have kept one credit card account open, with a zero balance, and modest limit, which is for dire emergencies.

I would find it hard to accept that we couldn't find a lender to help us.

Thanks for replying HappyMJ :beer:

Would be very interested to hear other's opinions, good or bad.

amnblog

If the broker picks the right lender this has a strong chance of going through based on what you have outlined here.

Thrugelmir

When were the defaults settled? Did you make full or partial settlement of the debt?

gestion

Thanks to everyone who has responded

Two of the defaults were settled in 2014 (early part of) and the rest were settled much earlier than that; not long after the defaults happened in most cases.

All of the settlements were in full.

One of them is slightly annoying as it was a genuine mistake. It was a British Gas bill from a property I lived in in 2008. The default was registered in 2011 for that one, and somehow I never became aware of it until the end of 2013. Turns out I did owe the money and for some reason I never received the final bill. I've not tried to fight it nor do I know if I can.

I would actually say the date of default should be much earlier than several years after I missed paying the bill. Maybe I could contest that one?

If I was able to contest the default date, there, it might actually be over 6 years old, really.

gestion

Mortgage broker doesn't seem hopeful

Trying to get a decision in principle with Halifax first.

He is concerned because two of the defaults were still active in 2014.

kingstreet

What's the purchase price and mortgage amount?

gestion

Deposit: £12,150
HTB Equity Loan: £48,600

Mortgage: £182,250
Purchase Price: £243,000

Should be a LTV of 75%, though I appreciate not all lenders view it that way.

Repayments should be about £800 per month (probably best case, but we can afford more).

kingstreet

Thanks.

I eventually noticed the £800 per month and realised the mortgage had to be under £250k, so I did consider deleting the post.

Jack_Johnson_the_acorn

gestion wrote: »

Deposit: £12,150
HTB Equity Loan: £48,600

Mortgage: £182,250
Purchase Price: £243,000

Should be a LTV of 75%, though I appreciate not all lenders view it that way.

Repayments should be about £800 per month (probably best case, but we can afford more).

We have roughly the same HH income and our mortgage is 1/2 that..... Don't think I'd be comfortable with a mortgage of that size.

Do you have strong prospects of earning more?