Mortgage Anxiety

london1983

My wife and I have just had an offer accepted on a house.

We have a 45% deposit and are looking to get a mortgage agreed in principle however I am very concerned it’ll be declined due to 1 defaulted account I have on my credit file.

The account was settled in July and there are no other black marks against me.

We both earn well and my wife has an excellent rating. How critical is this default in terms of being accepted or declined?

DRMANTISTOBOGGAN

When was the default registered, and how big is it?
One default isn't a straight no from some high street lenders and that size deposit will weigh heavily in your favour.

london1983

Thank you very much.

The default was £320 which was paid over a 4 month period and settled in August this year..

We have a £325k deposit to put down against a £685k house.

ACG

If you have a £325k deposit why has it taken you 4 months to clear £320? - I dont need an answer but thats what an underwriter is going to be thinking.

What was te default for? (ie loan/mobile phone/credit card).

Your deposit is probably going to be the saving grace here. I think quite a few high street lenders will not do this, but I think there will be a couple who would take a view on it. Worse case scenario there will definitely be lenders for it, but potentially not high street lenders. This probably is a job for a broker just to give you the best chance possible of getting normal rates.

london1983

We have just sold my wife’s flat so the deposit is the equity form that.

The default was for an online store for an account I thought I’d cleared. They had been sending correspondence to my old address hence the default as I was unaware. It’s now shoeing £0 on Experian but is still being flagged as a default and is bringing my score down.

I’m being totally transparent with the broker. You’d suggest he’ll not go for a high street choice on this news?

Thank you for the advice.

ACG

I would be surprised if there were not 1 or 2 high street lenders who are worth trying first. Failing that then there will be other options but the rates will jump from circa 2% to maybe 4-5%.

If your broker is ruling out high street lenders I think I would try another broker as that would be quite costly on £360k mortgage. I am not saying it will be a high street lender, I am just thinking there is a chance.

amnblog

You've not said when the default was registered which is key.

I can think of two or three 'High Street' lenders that would consider this case.

At least you are being smart enough to use a broker.

london1983

Default date was 14/01/2015.

london1983

Also, if our mortgage in principle is declined for a high st option, how quickly can we explore other options as the vendor is keen to exchange before Christmas.

ACG

Same day. Getting declined is not the end of the world. It is just not going to help your credit score. But the non high street lenders will accept you all day long based on what you have said. A one off satisfied default under £500 is not that bad in the grand scheme of things.

ShivasPlace

Someone on the 'Awaiting Mortgage Decision' thread said that they got accepted by NatWest with two defaults and an AP… so you never know!