Mortgages bad credit and defaults

xcvx

Hi everyone  

Looking for some advice...
Myself and my partner are needing to submit a mortgage application in the  ext few weeks as are reserved plot is coming up for sale. We will be using HTB 20% equity with a 5% deposit ourselves.

My partner has perfect credit. I had (what I thought) 3 defaults all satisfied and from 2018, and multiple PDL from 2017.  I checked my credit reports in Jan when we were starting to look at houses and noticed there was an account which had an outstanding balance of 200 which I paid straight away (this was a PDL, i had no correspondence from them at any point) so after being told our house is up going up for sale I checked Equifax as I had only been looking on experian and saw that that account had actually gone into default in 2018. So now I have 4 defaults in total and a PDL outstanding up until Jan. 
Is a mortgage still possible? Precise say 5 DF in 24 months which I fit but worried about the PDL 

The default is only showing on equifax and it will not even show on experian.

Mortagesteve

Hi xcvx,
Any defaults registered over 24 months ago can be ignored and as you say, Precise accept 5 in 24 months with other lenders  accepting defaults to varying degrees. There are 5 other lenders out their offering Help to Buy mortgages with bad credit.

ACG

There is a possibility you could get this through at normal rates. I am not sure I would be going straight to an adverse lender if im being honest. It might be a good idea to get a good experienced broker on it. 

Lucywrix

@xcvcx @ACG Hi, just wondering if you have any updates or progress??? Me and my partner are in a similar position but 0 defaults, my partner had some PDL’s (which are now all settled and most from 2019) and 1 missed payment from January. My credit score is excellent on Experian (990/999) and his is (725/999, fair) Our case is with underwriters and Mortage with Santander. So nervous! 

Kiwistrawb1990

Lucywrix said:

@xcvcx @ACG Hi, just wondering if you have any updates or progress??? Me and my partner are in a similar position but 0 defaults, my partner had some PDL’s (which are now all settled and most from 2019) and 1 missed payment from January. My credit score is excellent on Experian (990/999) and his is (725/999, fair) Our case is with underwriters and Mortage with Santander. So nervous! 

Hi lovely, I had a history of extensive payday loan usage in the year before we applied for our mortgage (circumstances changed dramatically a year later) and we got through on the High Street. I also had a default. This was in lockdown 1.0 when all mortgages fell off the market and were just returning. I'm sure you will be absolutely fine. 

ukri

Your scenario may not be the same as Lucy’s.

Lucywrix

@Kiwistrawb1990 This gives me hope! Thank-you so much.

Here's a little background about me and my partner. (Sorry it's so long)
Credit scores - I have a perfect credit score (990/999 on Experian,) However, I do have an overdraft of £500. I have 2 active credit account but with no balances on them and have always paid them off in full in the past. The last time I used one was over Christmas (only for £100) and paid it back in full in January this year. I also have a store card with Very which is at £600 (I make regular payments each month.) All my debts total up to £1200.
My Partner - His credit score is fair (725999 on Experian.) Due to his mother being an alcoholic and not paying bills, my boyfriend had to get a few PDL's in 2018/2019/2020 to help pay for bills, electricity, gas, etc... All of these PDL's are now paid off. He has 2 missed payments which are quite recent (Dec/Jan 2020) but it was only for £33 and he paid it off straight after he was notified of it. My partner has a credit limit with Indigo Michael of £400 and he has used £350 of it, this is always paid off, in full, every month and he won't be using it again after this month. As well as this he also has a Very Store Card which is at £300 (he makes regular payments every month of £10.)   

We both have a combined income of around £40,000 annually. We are both in full-time work and have 0 dependants, 0 car finance, and 0 adverse credit/defaults.

The property is on the HTB equity scheme (5% deposit, 20% Loans, 75% Mortgage.) On market for £210,000.
Even though it is only a 5% deposit (£10,500), I do have £15,000 to put towards it if need be. But, I was actually going to pay off ALL of our remaining debt with this money that will be leftover. May I add - the deposit is gifted and if from my father who has been saving up shares for me since I was born.

We applied for an AIP with Santander through a Broker (Burchell Edwards) on 05/03/21 and it was accepted! We did the full application on 08/03/21, Valuation was done on 10/03/21, Santander asked for more documents (P60) on 11/03/21 and they were submitted the same day. We have heard nothing since. Some people on here are going to tell me I'm impatient, I know! But when you've found your dream home, It's hard to stop the anxiety.

Has anyone been in a similar circumstance or had Clients who have been in a similar circumstance in the past and have been approved? I know getting an AIP is good news but it doesn't secure the mortgage.

Lucywrix

@Kiwistrawb1990 Also, who was the high street lender? Who gave you the Mortgage?x

Kiwistrawb1990

Lucywrix said:

@Kiwistrawb1990 Also, who was the high street lender? Who gave you the Mortgage?x

Ours was with Natwest. Partner had perfect credit mine less so with the default and payday loans. Worth noting that I hadn't missed a payment since 2016 and we had no credit card/store card debt only car finance. Ours was also HTB with gifted deposit.
So as @ukri very helpfully and relevantly (lol) pointed out, our situations are slightly different, but the point of my comment was to reassure you that PDLs don't necessarily mean a straight up decline. My last PDL was paid off in the Feb and we applied for our mortgage in the May.