Mortgage with default

Blod79

Hi
I have a default on a credit card dating from 2018 (£5000), I have been paying it back and it will be clear in a couple of months. My husband and I are looking to move soon but I am worried as to how much this will affect our chances of getting a mortgage.
We will have a deposit of approx 50% from the equity in our house. I am a full time student and although I am in receipt of a grant, I know this is not recognised as income for mortgage purposes. My only other income is child benefit and tax credits totalling just over £3000 a year. My husband earns £25000 and has excellent credit. We are looking for a mortgage in the region of £80,000.
If anyone has any advice it would be appreciated.

mortgagetakingages

I'm no mortgage advisor but it looks like there should be options for you. Depends on your affordability with other debt etc. Recommend you get a MA

haras_n0sirrah

Most mortgage lenders will want the default satisfied and showing as such prior to application.
Have you been in a debt management plan?

Blod79

The debt is with a collection agency and I have been paying it monthly, it will be cleared before I apply for a new mortgage.

haras_n0sirrah

The only way to know for sure is to contact a broker with a copy of your credit files (not a factory line one like l&c - you need a proper broker) - With that much equity there will be options for you but it will depend on how things have been recorded as to what interest rate.
If you don't have a broker there are a number of independent brokers who post on here. Why not read the boards and pm a broker who you feel can help. We brokers who post here are not allowed to contact forumites but most of us are happy to respond to pm's asking for help. You can identify brokers as we have to display in our signatures that we are mortgage brokers.

Blod79

I checked my credit file yesterday and it is marked as settled which I am surprised by as obviously I am still repaying it. Everything else on my file is fine.

haras_n0sirrah

As I say - get your credit files in front of a broker who can interpret the information and apply it to lenders criteria. This is not a simple diy case. 

MovingForwards

Blod79 said:

I checked my credit file yesterday and it is marked as settled which I am surprised by as obviously I am still repaying it. Everything else on my file is fine.

Double check how much you have paid since you set up the arrangement as you may have cleared it or the debt may have been sold on (it does happen!)