Adverse mortgage

Liam4410

Myself and my partner are looking on buying a house shortly.

We have accepted an offer for her house and together with savings will have a deposit of just over 30K. We are looking for a property for just under 300K so will have around 10% deposit (Mortgage amount of around 270K)

The only snag in this is a defaulted mobile phone account of £130 from just over a year ago which was settled the minute I found out about it (completely my fault due to being unorganised and not notifying the phone company of a change of address). This is massively impacting my credit score whereas my partner has a score in the high 900s. We are both emergency service workers and currently have a combined income of just over 60K which will increase to 80K in two years time.

Does anyone know what the chances of us being approved for a mortgage would be? Would a specialist broker be better? 

ACG

It is a difficult one to answer in the current climate. at 90% the market is improving but it is still not where it was 12 months ago. 
12 months ago, I would have said not a problem. Now, I think it will be tougher. I would not rule it out but you are going to be reliant on how your application scores or trying to find a lender who will take a view. 

The fact your deposit is from your own means, it was only a small default and it has been satisfied a while will definitely go in your favour. 

It is probably worth getting your credit report and speaking to an experienced broker. Its not a no, but at 90% it wont be for every lender. 

[Deleted User]

There arent that many lenders at 90% but one of them runs purely on credit scoring and sometimes can get a alightly adverse case through by virtue of the combined score being high enough (the lenders scoring method, not the useless ones they show you on credit reports).  
There is also a lender at 90% who will ignore communications defaults so would in theory be a good backup.  Your interest rates will be higher 

I would get a broker to look at your overall circumstances and see what you can get.  If this is the only issue I would be confident you will get something offered.  Whether you like the terms being offered is a separate issue

Liam4410

Thanks both for your answers. Are we talking 5% and higher do you think? If we were to squeeze to 15% do you think that would have a massive impact? 

ACG

Not necessarily, you could be talking normal rates, as a back up you might be looking at a manual underwriting lender where rates may be slightly above the 3.5% mark. Then there are the adverse lenders but there are not many of those at 90% LTV. 

15% deposit would massively improve your chances but 10% might be possible, the devil is on the detail. I prefer to be pretty direct, if I thought you stood no chance at 90% I would say so. 

Liam4410

Thanks for the responses. Feel like a bit of a weight has been lifted. We will probably be looking at getting an AIP around March after the house sale has gone through (we shall be spending some time living with family to get used to the area we are relocating to). Do you think this slight delay will help us even further? Default will be around a year and a half old then and hopefully more 10% mortgages will be back on the market. 

[Deleted User]

I cant see a whole lot changing between now and March to be honest.  Maybe some more 90% lenders will return but i doubt they will be ones that will be helpful in your situation.   Best we can hope for is the credit scoring requirements for a couple of lenders to start to drop a bit as I am getting a few cases that would have gone through at 90% a year ago now needing to be done at 85%.     
You should have options though either now or then.   Just try keep your bank statements as clean and tidy as possible between now and then.  Dont go over overdraft limits,  dont do loads gambling, and dont miss payments on anything.