MORTGAGE WITH A DEFAULT? possible?

A-trak · 19 July 2018 at 4:37PM

Hi everyone hoping to hear some success stories. Currently house hunting and hoping to find somewhere to buy. However my concern is with my credit score. I have a default from an old student overdraft account that was applied in August 2016 for £2139 and paid in full in February 2017. Apart from this I have no other poor credit issues however the default I believe is contributing to my 'Very poor' (verging on poor) credit score with Experian. I have been told by both Barclays and The Progressive that they wouldn't consider an application until default has been satisfied for Three years and Two years respectively. I have recently spoken to a broker and advised on our circumstances verbally and he seemed to think it would be possible to obtain a mortgage. In the process of sending over our further information to the broker to consider lenders. However after the discussions with the two lenders I feel I have little to no chance of being approved for any sort of mortgage. Currently looking for somewhere in the 100k region with a 10% deposit. However I feel with the credit score I have of poor rating I wont get past the first stage with lenders. Any observations or insights welcome! thanks in advance!

heston2014 · 19 July 2018 at 4:47PM

Hi

I would strongly suggest going through a Whole of market broker who can place you with the right lenders as going directly to high street lenders could cost you hard searches on your credit file if you were to submit an application or 'agreement in principle'.

There are lenders that will consider adverse credit, however, it will also be based on affordability but a good broker can certainly help you find a suitable lender.

Good luck.

sal_III · 19 July 2018 at 4:51PM

You have done the correct step by approaching a broker, you are unlikely to be able to find a Lender yourself under these circumstances.

I know for a fact that it's possible to get a mortgage with a default on your credit file, but in that case the LTV was 55%, not 90% like yours.

There is nothing you can do but wait for the broker feedback based on the details you provided.

Very poor credit rating in experian based solely on 1 default seems a bit odd. Are you sure there is nothing else in your credit file?

[Deleted User] · 19 July 2018 at 4:52PM

A-trak wrote: »

However I feel with the credit score I have of poor rating I wont get past the first stage with lenders.

Remember it's all about your circumstances and credit history. Never the scores or ratings, which aren't real.

kingstreet · 19 July 2018 at 4:56PM

You've picked (at random?) two lenders whose criteria says "no" to a £2k default in August 2016 (which many will as it's less than two years ago) but you doubt a broker who has access to many more lenders.

If you happened on a lender which would accept you, would you assume all other lenders would say yes?

You may get 90% (more lender options at 85%) but you won't be getting Barclays-type rates.

Best option would be to obtain all three of your credit files Experian, Equifax and Call Credit and putting them in front of a broker. The data may not be the same on all of them and you may benefit from a lender taking data only from the CRA with the best version of your credit history. A broker will know from experience who to consider and who to avoid...

ACG · 19 July 2018 at 5:02PM

There are 2 high street lenders where on the face of it you fit criteria.
Hit and miss as to whether or not you would be accepted.

There are another 3 lenders I can think of who would probably accept you but the rates will jump up a little.

On a side note, I have had some of my account managers in the past tell me a case will not pass, only for it to be accepted it. Trust the broker, why would they waste their time if they did not think it would get accepted.

I think the biggest potential issue is having too many credit checks carried out in addition to the default.

A-trak · 20 July 2018 at 9:42AM

Hi everyone,

Thanks to all for taking the time to reply. Some things to consider , look at and I appreciate everyone providing their perspective on the issue.

I will continue to engage with the broker and look at my finances from top to bottom so I have no surprises.

I will post again in the future if there is any progress/outcome.

Thanks again it is appreciated!

sandyk01 · 20 July 2018 at 11:21AM

There will be other lenders who will lend to you via a broker- I call them backdoor lenders as they aren't the normal high street ones. I have friends who have had CCJ's on their account (less than 2 years) and they got a mortgage. The rate of course is going to reflect this.

A friend had an unknown CCJ on his account (for a £20 phone bill!) and he got a mortgage once it was known and settled- rate was higher but after two years he built up credit and remortgaged with a high street bank.

[Deleted User] · 21 July 2018 at 2:06PM

Hi - how do people recommend actually finding adverse credit brokers?

There are plenty of ads on facebook etc, but I'm more wary they're a 'scam' (well, not actually very good) if they're advertising all over the shop.

I'm happy for everything to be all online like L&C or Habito, but doubt they'll cater very well for adverse?? (Applying a few days after my bankruptcy discharge reaches 3 years). I've found 2 lenders that look good, and I could go direct... but I'm thinking a broker might make a better deal of explaining my adverse etc?

YHM · 21 July 2018 at 3:22PM

Online brokers (Habito, Trussle etc) aren't setup to cater for adverse, so I wouldn't look down that route.

Don't be driven by saving pennies and looking for free brokers when it comes to specialist financial / mortgage advice...

[Deleted User] · 21 July 2018 at 4:02PM

Thank you, yea I am very torn over the fee aspect. It's shared ownership so advance only ~70k, hence reluctence to pay fees! But sometimes "you get what you pay for" so to speak!

Does going with a broker actually give a better chance of acceptance? It's Nationwide/Cambridge Building Society who look like my only/best shot. Possibly a few others that either insist on it being an advised case or aren't clear (so I know a good adverse broker would be helpful for those).

It's a catch 22 - paying £xxx to be advised on my very limited options and it hopefully going through easier... but then we may end up with Nationwide anyway who are probably my first choice to just sling an app through!

Would somewhere like unbiased be best and just looking through the websites of the top rated ones near me to read reviews, see if they mention adverse etc before approaching the broker to discuss further and pricing options etc? I don't want to give unbiased my phone number yet as I'm not ready for a month or so!

MORTGAGE WITH A DEFAULT? possible?

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