Advice on obtaining mortgage

Manc87

Hello

I am looking some advice on obtaining my first mortgage. I am a first time buyer, making a joint application for a new build. My partner has a completely clean credit history. I have a default of £125 from 2011, settled in 2012. I have a completely clean record apart from that. I have nothing outstanding on my credit cards. I do have a vehicle payment of 120 per month. I earn approximately 36000 and and my partner 25000. We require a mortgage of 150k.


Will I have issues because of this default? What is the best course of action for us? Any advice is greatly appreciated.

John

Arleen

Given the default I would recommend a mortgage broker as they know who to apply with spotty history. Alternatively you could wait for 2 years till it drops off your record which can then lead to better mortgage offer.

Manc87

Thanks. Is it possible to get a mortgage with this on my credit file? I'm looking for one with a 5% deposit. Is there anything I can do to help the situation?

[Deleted User]

A bigger deposit would help, but that may not be a short term option.

David_White

A mortgage with the right lender should still be possible if that is the only credit issue you have.

Hutch100uk

Are you using help to buy? I think you may need a clean credit file to get the help to buy. The builders should have a mortgage broker they recommend to buyers so try speaking to them or another independent broker who deals in new build mortgages.

David_White

Hutch100uk wrote: »

Are you using help to buy? I think you may need a clean credit file to get the help to buy.

This is not always the case.

smdabs

The amount of the default is irrelevant. How many times did you default? What kind of default was it?
Direct Debit/Credit Cards etc?


Basically, while I understand banks can be extremely harsh when it comes to mortgage applications, if it is one payment from years ago (but within 6) that you have defaulted on a maybe even a couple, it is unlikely to have an entire application rejected on that basis.


In the event you did fail the auto credit scoring, you can refer your application to the Specialist Underwriters - which are available across most, if not all banks. They conduct much more thorough investigation into your background and finances and are much more willing to take different circumstances/events in to consideration.

It is also irrelevant in to how much you want to borrow. Affordability calculators take in to account income and outgoings and determine whether you can make the payments based on this. IT is very much based on figures. It is not based on credit history (this is a different consideration/aspect of the application assessment).


Therefore, i would not worry about your deposit or LTV as these are separate issues.

As a previous poster said, speak to a broker first to put your mind to rest. Applying to the bank directly and through a broker usually is not much different as the banks do still have to follow their lending code and set practises.

In my personal opinion, i think you should be absolutely fine to continue with your mortgage application without worrying too much. Banks WANT to lend money (much to everyone's disbelief) as it earns them so much profit in the interest you pay. One oversight/default in an otherwise clean history should not put them off.