Defaults and mortgages

Octaben

Hi

I am after some advice and hopefully this is the best section to post in

I’ll try and keep this as concise as possible. Basically my girlfriends ex partner ran up debts in her name when they moved abroad in 2013 (using her credit card and not paying off a store card agreement that he had said he would as well as various other missed payments)

The end result was that she ended up with a £10,000 credit card bill (how the lender let this happen when no payments were being made I’ve no idea) a £3000 overdraft and a £1000 store card bill. Plus an unpaid phone bill. She has 4 defaults on her credit file from February – June 2014.

She entered into a debt management plan in February 2015 which I have since paid off in May, at a reduced settlement amount, so is now debt free

I’m trying to work out at what time we may be able to look at getting a mortgage. Am I correct in thinking that the default date is the first date at which the accounts defaulted, and not the date that the account was settled?

We will have around a 60k (20-25% deposit) and I have an excellent credit rating. I’ve read that 2 years after default is a good starting point, but just trying to work out if that’s correct and when the 2 years starts

All help gratefully received

Thanks

Ben

solentsusie

Hi Ben


You may be better off posting this in the mortgage board.


Defaults are taken from the date the actual default was registered, so if the default date was January 2014 and you settled it in April 2014 the default will drop of in January 2020 not April 2020, whether it was settled or not.


I would advise seeing a mortgage broker as they will be able to advise which lenders are more lenient with defaults. I know some lenders completely ignore mobile communications ones as my friend managed to get a standard mortgage through a broker when she had a problem with Vodafone and they defaulted her. My friend was also advised that after three years a number of lenders take less notice but it does depend on the lender and the amounts on the defaults. You are extremely unlikely to get a high street mortgage with any defaults showing.


If you go for a joint mortgage your partner's defaults will be taken into consideration regardless of your credit rating and you are likely to be offered mortgages with higher interest rates. Having as big a deposit as possible will help so save as much as possible in the meantime.


You will also have a financial association if you have a joint mortgage so their defaults may be taken into consideration when applying for any other financial products.


Do you need to apply for a joint mortgage or would it be possible to apply on your own as this might be a better option if financially viable in your circumstances.


I would suggest consulting an independent mortgage broker now as you can then assess your options going forward.


Good luck.

David_White

1) Her credit report will show "default date" on each account that has defaulted. It will drop off her file 6 years from that specific date.

2) You would have limited options when she has no more than 2 defaults in the last 24 months.

3) After all defaults are over 2/3 years there would be more lenders available to you.