Halifax Mortgage with a Default

staylor2500

Hello everyone,

I’m looking for some advice on a tricky situation I’ve found myself in with a mortgage application. I applied with Halifax and was initially approved for a £500k mortgage at 90% LTV, being told I had an A1 credit rating. During the process, I informed them about a past issue with my credit, and they assured me that both my wife and I were coming back as A1.

We went through all the stages, made an offer on a house, had it accepted, and submitted all the paperwork. However, I was just informed that the application has been declined unless we increase the deposit to 25%. The reason? A default on my file that I had already disclosed earlier in the process

Here’s the background on the default:

. Its only registered with Transunion

• It stems from missed payments in November and December 2018.

• The default was registered in January 2019 for £8k.

• It was related to a joint card with my ex-wife while I was abroad. I had returned my card and was unaware of the missed payments.

• I only found out about the default when I relocated back to the UK.

This is now a big stumbling block, as increasing the deposit on a £500k house is a significant jump. My current situation:

• The default remains unsatisfied.

• I’ve never missed a payment on credit apart from this.

• I have a 1% utilization rate on my credit cards and owe less than £300 in total on my file.

• I’m self-employed, which complicates things a bit further.

A broker has found a lender who might approve the mortgage, but their rate is 1% higher, which makes the mortgage far less affordable.

My Questions:

1. Would it be better to wait until the default comes off my credit file? I believe this might happen soon as it’s nearly been six years (January 2025), but I’m not sure if it’ll fall off automatically or take longer.

2. Are there any banks or lenders that might consider my case without requiring such a large deposit? I’d prefer not to take the higher rate if possible.

3. Does anyone have experience dealing with a similar situation? I don’t want to “rock the boat” with my ex-wife, as we have kids and I’m trying to move on amicably, but this issue is really holding me back.

4. Is there a better way to explain this to lenders, given that the issue was from a joint card, and I wasn’t aware of the missed payments at the time?

This situation has been quite stressful as we’re so close to securing a home, but this default has thrown a wrench in everything. Any advice or insights would be greatly appreciated!

Thanks in advance!

ACG

1 - possibly. 
2 - Probably yes, but will depend on the details of the case as a whole. 
3 - Most experienced brokers should be able to help you overcome a default. 
4 - Lenders dont really care about the details. If its on there, its on there.

Either wait and see if it drops off and re-credit score the application or speak to a broker and see if they can find you something sooner would be my suggestions.