Mortgages After Default

Firsttimebuyers

We've recently been declined by Aldermore for a mortgage - I have a default from August 2011 which is unsatisfied, and between us we have some debt, all this combined with wanting a 95% Mortgage meant a no.

We've decided to save for a bit longer, and wait until the default has left my credit file before trying again. Does the default leave my account as soon as it's hit 6 years?

If we went for a Help to Buy New Build with 5% Deposit, and 20% Equity Loan - would the fact that the LTV is 75% help us? We have 5% now, so could spend the next few months getting the debt down rather than attempting to save 10%?

Thanks in Advance

David_White

You'd probably be ok with the HTB Equity scheme now with the right lender.

Firsttimebuyers

The Interest Rate would be a bit poor though I guess? We're not desperate to move, so I think waiting until August for the default to drop off means we'll get a better rate - which means we've more to put aside to pay off the equity loan.

The development we're looking at are only releasing in stages, so waiting until August for another stage to be released isn't an issue for us.

I know it's the unsatisfied default and debt which is killing us, as our affordability is excellent.

jessnat995

Ads said it is possible to get one with unsatisfied default but pay a little higher.

I thought aldermore accepted defaults?

Firsttimebuyers

They do accept defaults, but our broker said the fact it was unsatisfied, combined with having some debt meant we were too much of a risk.

David_White

Generally speaking the further away from credit issues the better the interest rate.

In answer to your previous question, the default should be removed from your report after the 6 year mark.

Firsttimebuyers

Thank you - so it is worth waiting until after August then. I know it opens a lot more doors when looking at lenders.

Will banks look favourably on Help to Buy helping achieve a 75% LTV? I assume so as it's less risk for them.

David_White

It's personal preference I would say... as in, how desperate are you to purchase before August?

This is purely anecdotal but I feel like I get less hassle on the mortgage side with my HTB Equity cases and 99% of the clients I help have credit issues to put in context.

Firsttimebuyers

Thanks - we're not desperate to buy before then, so I think we'll wait until the Default has dropped off so we can have more options - and pay off the credit card at the same rate we've been saving.

Firsttimebuyers

Double Post