Mortgage application- defaults from years ago

captainradical

Me and my husband are looking to buy a property for the first time, we have £35000 deposit and putting our income into a mortgage calculator online they all seem to suggest we can loan 320-360.

We found a property for £360 but on speaking to a mortgage advisor at HSBC he suggested we could only loan £270, he couldn't tell us why so I'm wondering if it's because of my credit rating? I checked my rating recently and came out as "fair" on Experian- I had credit card debt that I had defaulted on but partially settled in 2010, I have no further debt now, could this be why even though it was years ago? This will get wiped in July 2016 however I will be on maternity leave then so that will also affect any mortgage applications.

From googling beforehand I was under the impression that old settled debts were not such a big deal but now I'm worried they are!

Liverlad67

Defaults fall off after six years paid or not. Some lenders ignore them some do not hsbc are VERY strict. Have you considered using a broker? That's what most people will advise. The future childcare costs will impact your affordability due to the mmr rules I think but not 100%. A broker would help I think in your case

ACG

Defaults are an issue.
The dates and amounts are the important bit.

HSBC do not deal with brokers so its difficult to give an idication but the loan amount being reduced could either be affordability or if the loan amount is say 75% of the purchase price, then it could have been capped from a risk point of view.

captainradical

Thanks for the advice! I guess a mortgage broker is the next step!

The defaults were for about 2000 but partially settled as I paid it off I a lump sum. So they're not outstanding. It was in 2010.

I didn't know HSBC were known for being strict!

wileycat

I would definitely try a broker who would know which lenders will lend to the upper end of the bracket you need.
Just had to move across from one lender to another to get a top end amount from the lender. Not the cheapest product on the market, but a full offer at 4.6x our combined income so am happy.