Mortgage with Unsatisfied Default?

mxr808

Hi all,

So last Tuesday I went to a mortgage advisor and looked at the possibility of getting a mortgage with an unsatisfied default that is just under 5 years old. It is for £1400 with Natwest bank for an overdraft that was recalled while I was a very poor student. I am unaware who the debt is with now or who to pay and have no heard anything about it for around 2 years now.

During the appointment I got an agreement in principle through their system from Halifax for £225,000 with a 15% deposit. I was then told I could put in an offer on a house with this and proceeded to do so which has now been accepted.

My question is, how likely is my full application to get rejected with Halifax once I go forward based on credit rating? I have every intention of keeping up to date with the mortgage and I have 3 credit cards which I utilise and pay off every month.

I'm 23, earn £45,000 per year basic and have ~£1000-1100 disposable income per month. Looking for a 30 year mortgage.

My mortgage advisor is fairly confident but I'm not so sure.

Thrugelmir

I wouldn't be so sure either. Why would any lender wish to advance money to someone who hasn't previously repaid what they owe. Lending is as much about the profile of the borrower as their credit report.

mxr808

Thrugelmir wrote: »

I wouldn't be so sure either. Why would any lender wish to advance money to someone who hasn't previously repaid what they owe. Lending is as much about the profile of the borrower as their credit report.

Exactly my thoughts. I did have issues with the default itself (Bank charges make up part of it, no default notice was served) but they are a pain to get removed.

Why did the agreement in principle not get rejected? (I ticked the box for defaults in last 6 years). Are agreements in principle not worth much when it comes to the full application?

mxr808

Got so paranoid about this that I've gone ahead and tracked down the Natwest debt (Which was not easy on a 2010 default!) and paid off the full amount of £1350. They were very polite about it all and will be receiving a letter to say it has been paid off. Am going to target a mortgage provider that hopefully has a bit more of a personal human based underwriting system and hope the letter showing I have just settled it may help.

Even if it doesn't I guess I owed the money in the end (Most of it. Pesky bank charges) so shouldn't have waited so long repaying.

amnblog

Have Halifax said no on full application?

mxr808

amnblog wrote: »

Have Halifax said no on full application?

I have an appointment on Friday with mortgage adviser to do full application but Halifax is not the solid choice but were the ones to give me an agreement in principle and was the lender that the broker was suggesting I go with. I may try and push for her to target a lender that provides to less-than-optimal credit scored people like myself.

There seems to be an obvious gap between lenders that will only give mortgage to squeaky clean people and those that will lend at extortionate sub-prime rates to people with CCJ's and bankruptcies. No middle ground but hopefully we can find something.

Will keep updated once I follow through on application so people can know how it goes applying with an unsatisfied (or recently satisfied) default.

amnblog

You sound like you are advising the broker rather than vice-versa.

mxr808

amnblog wrote: »

You sound like you are advising the broker rather than vice-versa.

Well I'm just trying to be on the safe side to be honest. I'd happily sacrifice a small interest rate increase for the increased confidence of acceptance.

amnblog

Is your current broker not a poor credit specialist?

glentoran99

Thrugelmir wrote: »

I wouldn't be so sure either. Why would any lender wish to advance money to someone who hasn't previously repaid what they owe. Lending is as much about the profile of the borrower as their credit report.

because it was 5 years ago and peoples circumstances change

glentoran99

http://www.halifax.co.uk/mortgages/mortgage-information/mortgage-promise/

Looks like you should be fine

A promise is a promise