Getting a mortgage!

J_blondie

Can anyone share advice or help.


Both my husband and I had some minor defaults which are now all settled, They are a few years off before they will come off our credit reports. We have also just paid off the last part of our car finance, No credit cards. We both have good longstanding jobs and a 10% deposit for the price of the houses we are looking at.


We tried to get a mortgage via a broker in Feb this year with no joy- however the defaults weren't settled or the car finance paid at this point. He advised us to give it some time and settled anything outstanding which we have now done.


my question is what else can we do to be able to get a mortgage??? improve credit? etc....

David_White

There's no such thing as a "minor default".

A 90% mortgage can be tricky with bad credit, but it's not impossible depending on the dates your defaults were registered.

If you can stretch to a 15% deposit there would likely be more options available to you as well.

J_blondie

Sorry I meant they weren't for huge amounts so we managed to pay them and settle them.


We might be able to stretch to a 15% when it comes to it, Will depend on the price of the property.


Will the fact we have now settled things help us??

AnotherJoe

Just obvious stuff.
1. Earn more money.
2. Save a bigger deposit.
3. Build up a steady record of ontime payments (I'd say there's no harm at all having one credit card with low limit and modest expenditure that you'd make anyway, say groceries, regular repayments will establish a good credit history. Just pay off the whole amount every month.

David_White

Settling defaults isn't always a deal breaker to be honest as not all lenders require it.

It is a positive thing (and the right thing) to do though and I'd like to think it shows the lender a bit of willing from your side.

ACG

With a 10% deposit, assuming the defaults are 2 years or more there will be a couple of lenders who will consider it.

With a 15% deposit you are opening up to a couple of extra lenders, potentially lower rates and an improved chance of acceptance.

I would speak to a broker with experience in the adverse market.

J_blondie

One default is with BT and is 14 months old the rest are at least 4 years old.

Would this BT default affect applying for a mortgage later this year?

David_White

It may make a mortgage with a 10% deposit hard.

Best to get your credit file in front of someone as your entire situation would need to be assessed before a solution was found.

ACG

I think it could be done, but I do think you will need a good experienced broker as there are probably not many lenders who would do it at 90% LTV.

Thrugelmir

Whilst the defaults may be minor in value terms. You haven't helped yourselves by not settling them earlier. As the accounts themselves would have continued to be shown as "unsettled" until they were. From a lenders perspective it tells them a lot about you as potential borrowers and is one method of screening potential applicants out.