Impact of default on joint mortgage application?

Supergirl83

My partner and I are first time buyers with a 5% deposit.


We checked our credit files today and whilst mine was fine with a score of Excellent his was only Fair. When we looked he realised he had a default on there from five years ago for a £10 debt from o2. He didn't know about the default and didn't realise he owed them any money as he cancelled the account years ago.


We have a mortgage offer in principle but that didn't take into account the default as we didn't know about it. Am going to ring the broker about it.


We have seen a house we like and want to offer on it but am concerned we wont be able to get a mortgage.


Does anyone know how big an impact this default could have on our application? Could £10 really stop us getting a mortgage? Will the fact that my credit score is Excellent help at all?


Thanks

TakeItAsRed

Defaults over 4 years and for this amount are normally overlooked or so i was told by my adviser.

A lot depends if it is satisfied.

Its my understanding that the bank will know about the default as they have done a soft search on the credit file already.

kingstreet

Which lender and on which of his three credit files is it visible?

Yes, they are different.

ACG

A lot of lenders will disregard it but not be overly concerned by it - but it will still be taken into account when scoring your application. Some do ignore if over a certain age/under a certain amount but not all lenders.

So you either need to check or consult a broker. As its a 95% mortgage your application is going to be more harshly scored than a 75% mortgage so its not a given that every lender will accept it.

Supergirl83

Sorry for not coming back sooner. Thanks for your replies.

Its showing up on Equifax, not sure about the others. We havent applied for the mortgage yet, we'll be going through a broker.

Feel more worried today because we applied for a current account with Barclays last week and they have refused us the current account but offered us a basic account. We only need that but i'm worried we were refused because of my partners default and that the refusal will lower our credit rating.

We've now had an offer accepted so i'm going to contact the broker who offered us the DIP.