Mortgage with Defaults

Westminster

Well our situation was different so obviously not indicative of your likely outcome. However, the headlines are:

Negative Points
1. Previous DMP for me, however, defaults were all over 6 years ago (so no longer visible), full & final partial settlements were agreed on all the DMP accounts and the final payment to the DMP company (Payplan) was over 3 months ago so not visible on my bank statements.

2. One of my DMP accounts never applied a default - the ICO and FOS both decided to agree with that lender (MBNA) so the adverse information was still visible at the point of application to the mortgage lender (it only got wiped out last month). What was visible was a partial settlement in Jan 2010 (and lots of account history prior to this - included late payments / arrangement to pay etc etc)

3. My wife had to be on the mortgage (pretty common requirement now I believe) however she is disabled and has never worked so the only income showing for her is her benefits.

4. We were applying for 5x my income

5. We still had something in the ball park at the time of £18k in credit card balances - although these were all on 0% balance transfers etc and we had the cash available to clear them (just about) prior to completion if the lender required

6. Amongst others, had previous defaults with both Barclays and Barclaycard (only settled within 12 months of our application).

The lender was fully aware of all of the above and despite number 6, was confident that Woolwich would be a good target as I wanted a modest initial tracker period and an offset. (I was confident interest rates would remain low - looks like I'm correct so far ... Also I wanted the ability to overpay more than 10% per year - we already have more than 10% sitting in the offset current account)


Positive Points
1. I had a relatively good salary (50k basic + monthly tax-free per-diem payments of £700-£1000 which could not be included in the calculations / application as they don't appear on my payslips) and stable job (I've been a pilot since 2009 and with my then employer 3.5 years at the time of application. I've since moved jobs (still a pilot) but now on 60k basic although this last month so nothing to do with our mortgage application.

2. We had a very sizeable deposit as we had owned my previous house for 11 years and despite only ever having an interest only mortgage, I had a modest overpayment on it and a sizeable increase in value). I don't recall the exact figure but we had around £128k equity before fees etc. Our loan to value was right around 65%


Outcome
For the reasons above, I was also initially skeptical of the broker's confidence and I was expecting issues to come up all the way through (pretty common if you read a few of the threads on here)

The whole application went through relatively smoothly (from my perspective at least - there was a fair bit of work required from the broker not only at the beginning of the application but throughout I believe). We got our offer - and when that purchase fell through, we got another one. It was headline rate, 5x salary etc etc. Also they only requested that credit cards were cleared within 30 days of completion - which was handy. I've managed to clear them all now anyway as the 0% has since come to an end.

Westminster

Forgot to say - I am told that the LTV being as low as it was can make up for a multitude of sins on an application ;-)

ACG

With a 15% deposit and £385 in defults I would be surprised if this can not be placed. The biggest issue is when they were registered but in all honesty, I would expect there to be options.

As has been mentioned it is a little worrying your broker has only asked for 1 report but I suppose the job can be done regardless. It may jus tmake a difference to the products available.

J_blondie

You've given my confidence some boost at the least.
Also the only debt we currently have is car finance with £1600 left to pay with not one missed payment. We have provided the documents for this to the broker also, its due to finish in Jan 17. No credit cards etc.


We can hope the lender looks at the bigger picture and sees our earnings, deposit and secure jobs as a positive and maybe they will lend on the basis we pay off the defaults?

J_blondie

Anyone else any advice or similar situation.

We should hear back from our broker next week but I fear bad news, surely with a 15% deposit and defaults under £500 we should find a lender?

TopperHarris

Just chill out and relax, I knows its easier said than done, I was in the same situation, just a couple of months back. It is in your brokers interests to get you a mortgage.

J_blondie

Thanks yeah defo easier said than done, did you manage to get a mortgage sorted?