Mortgage worry

Ehlana415

Hi

I hope someone can help, sorry in advance if this is rather long

Bit of background info.......

my partner already has a mortgage on a house which is up for sale, but has no offers as yet, the house has a small mortgage still outstanding on it of approx 70k. We have found a house we would like to buy, its 270k we have a 20% deposit to put down so need to source approx 217k for the mortgage, I earn approx 39k PA and my partner 31k PA so far so good and all OK. Now the sticky issues.......

I have since discovered I have two defaults on my credit file (2,500 and 500.), I didnt know they were there and so didnt tell our advisor when he was filling out the application. The defaults were put up at the same time as I cleared them :mad: they were from two debts I thought had been cleared until I was told they were still outstanding by the recovery company who bought them. I immediately cleared them once I knew. is this going to affect our application severley? will we still be able to get a mortgage at a decent rate?

we are also ( if it all goes through) going to be paying a slightly higher amount anyway as we dont want any tie ins as once the other house is sold we will be looking at putting another 120k into the house so will end up with a much smaller mortgage. As we dont know how long or how quickly the other will sell we didnt want to have to pay any penalties for early repayment/remortgaging.....

any help to stop me giving myself an ulcer over worry would be greatly appreciated

Ehlana

herbiesjp

HOw long ago were the defaults registered?

SOme lenders are more sympatheitc than others with this kind of scenario - who is the lender in question?

What has your broker advised?

Ehlana415

Hi

The defaults were registered in about April this year with them settled in the next month on my file... The original issue is years old and I honestly thought they had been paid off.

Then lender is RBS

The advisor is unaware as I only found these myself this morning :eek:

herbiesjp

I thinkyou should tell your adviser, if only to stop you wasting money on fees - by this I mean still go ahead with RBS, but do an agreement in principle first, as opposed to submitting a full application - I tend to do this for all my clients and it has saved many clients wasted time and money going for the wrong deals

He should be able to do this easily on-line for you

Then that will telll you if RBS will be happy to proceed or not, without having paid out any fees which you may not get back.

Ehlana415

Thanks so much for your input, I have heard from our advisor that it has been agreed, the credit score/search has been done and all ok, he just has to send off all the paperwork....

My next question is what happens next, does this mean that if satisfactory survey all will be ok?

Many thanks for your help again

Qual123

all it means is that they are prepared to lend to you, i would think that from the info you have given you are still a fairly low risk and will have no probs, they might hike the IR a little to reflect the defaults.

homer_j_3

I would be careful with RBS. If for any reason they turn around and say that they are no longer happy to proceed (and they can do this - although unlikely) you are required to pay the arrangement fee - which is something uncommon as most you would lose your valuation fee and that is it.

If I was your broker, I would process your application on a fee free deal and then when it is offered, ask for a product switch to a more suitable one.

It always worries me with rbs as I find them to be normally very picky with people who don't have a clean history - especially in the last 12 months. It could be OK but an agreement in principle does not guarantee you the mortgage and I would hate to see you lose money on admin fees.

Ask your adviser to ask the RBS if they are aware of the Defaults and if they have accepted you with these. If they have then it should be OK - if they haven't realised or spotted them then I would be upset that you may have to start the process over again but you will potentially save your self a lot of money in wasted fees. Even if you add the arrangement fee on to the mortgage, the application still asks for a card details, where they will take the money from.

lynzpower

You can also ask for the defaults to be removed, plenty of people have had luck with this in your scenario, however, it can take time to get it taken off ( ie about 3ms)

Ehlana415

Hi

Thanks everyone, they have searched my credit file (shows the date that they then accepted us) the default actually shows up as 5 yrs old, they are both due to come off next year...... I did ask about having them removed, but at this point there doesnt seem much point now.... my recent credit history is very good, no missed or late payments in the last 5.5 years.

Just to also clear up a point, there is no arrangement fee on this mortgage, the survey is being ordered by our advisors as well so would assume that whatever happens that would still be viable for any mortgage providor if for some reason RBS fell out of bed with us?!?!?! (assume this is done this way as the house is a new build?)

We are assuming they are happy with everything as my partner has a very good history so taken together we are a v low risk..

all this stress and worry for a short term mortgage as we would be changing/paying it off as soon as the other property is sold :rolls eyes:

Many many many thanks to everyone for your help and input

Ehlana