Default - Mortgage Options?

Niamh15

Hi,

My husband and I are looking to buy a house in 2017. My credit score is good however his is currently very poor - he has 2 defaults, one of which drops off his file in April 2017, the other April 18.

We both have a decent enough salary - him £48k, me £32k. Can anyone give a bit of advice on our options if looking at mortgages with a default? By the time of applying, likelihood is that he'll still have 1 default (from 5 years before) but we'll have saved a deposit of approx £30k.

Any advice would be amazing!

Senior_Paper_Monitor

Depending on the detail there will be several potential homes for this.

Get your reports to a broker.

ACG

There would be options now, so I am sure in 2 years time there will be options.

Senior_Paper_Monitor

Oops I missed the "in 2 years time" - I was assuming now

Niamh15

Thanks for your replies. Do you think these options would be competitive or with a much higher interest rate?

Senior_Paper_Monitor

You may not get the very best, but could expect High street or near High Street even now (depending on LTV - no good news if you are looking 90/95)

Niamh15

Thanks again. I'm guessing Help to Buy isn't an option even if default is 5 years old?

Senior_Paper_Monitor

Help to Buy Credit Criteria ...

All borrowers need to pass lender’s standard criteria. As a matter of routine, lenders will carry out their normal credit and affordability checks on all borrowers. Mortgages supported by the Help to Buy guarantee scheme cannot be granted to credit impaired borrowers. This means borrowers who within the last two years have owed overdue payments equivalent to three months’ payments on any type of loans, had a County Court Judgment over £500 or bankruptcy order within the past three years will not be able to access mortgages under the Scheme. Lenders will also check that borrowers can afford the mortgage and will ask for proof of income.

..... but Help to Buy will almost certainly have disappeared/changed by then.

ACG

There will be 5-10% mortgages available now, but the rates will be around 6%.

Niamh15

Thanks both, appreciate it!

Final question - how soon after defaults are settled is my husbands credit score likely to start increasing? I've read on here that the score itself doesn't matter, just the file data, but surely the score is reflective of the data?

ACG

The score on the credit agency you are looking at is not the score the lender has. Each lender scores your application differently so it will increase quicker with some lenders and slower with others depenidng on how much weighting they put on satisfied defaults.

Nobody has just 1 score.