Mortgage with defaults
Discussion
So my partner and I are keen to get on the property ladder- we have 20k in savings and can borrow 10k from parents but he has two defaults which will be three years old in September... one for a credit card bill and the other for a mobile phone.
Is there any way we can mortgage now or will we have to wait till the defaults are cleared after 6 years.
Is there any way we can mortgage now or will we have to wait till the defaults are cleared after 6 years.
How much in total are you looking to borrow? Is that 30k going to bring the mortgage to 60% or less of the total property value? How is the repayment of the 10k going to be done to the parents? Will it be off books as a long term, pay it when you can loan or is it tied in a legal agreement?
Two and a half years isn't very long in the finance worlds eyes since you were in difficulties so accept you are not going to be welcomed with open arms by a mainstream lender, but it's not impossible. Whats important is the detail asked above and the question of can you pass affordability checks and the stress test of mortgage rate increases?
Good luck, I hope you guys get a result.
Two and a half years isn't very long in the finance worlds eyes since you were in difficulties so accept you are not going to be welcomed with open arms by a mainstream lender, but it's not impossible. Whats important is the detail asked above and the question of can you pass affordability checks and the stress test of mortgage rate increases?
Good luck, I hope you guys get a result.
tilley_ said:
So my partner and I are keen to get on the property ladder- we have 20k in savings and can borrow 10k from parents but he has two defaults which will be three years old in September... one for a credit card bill and the other for a mobile phone.
Is there any way we can mortgage now or will we have to wait till the defaults are cleared after 6 years.
If your £30k will be equal or more than a 20% deposit then this can be done right now.........feel free to drop me a line if you need help with this!Is there any way we can mortgage now or will we have to wait till the defaults are cleared after 6 years.
My partner and I are currently trying to get our first mortgage.
We have 13k deposit, buying house from parents for 210k, valued at 220-230k.
I have one default from April 2010 so due to come off report in 2 months time. Value was £380.
We passed all the first checks for Natwest, had a mortgage in principal (I know this doesn't mean much now), pre-approved for loans etc. We had a meeting last week and passed all affordability checks and the mortgage adviser was confident in our application, at the last stage after a 2 hour long meeting we were declined, the actual reason wasn't specific but it was down to my credit rating, i.e they couldn't pin point the actual cause.
We were told that each application you make that carries out a "hard" credit search that is then declined affects your credit rating further, this doesn't help!!
We are in the stages first stages of talking to a broker who has asked for copies of our Credit reports to find out if they have a lender before proceeding.
It's well worth doing credit reports with both Experian and Equifax to see what your score is. Mine was fairly low whilst my partners is excellent, even though mine reads perfectly for the last 4 years, last missed payment 71 months ago etc, it still came down to the default.
I have read it can help to contact the company that the default is with, if the account has been settled they can add notes to each entry, or they can be removed if there was an error.
Sarnie, I've seen your name mentioned a few times with regards to mortgages, do you have any pointers for someone in our position?
Cheers
James
We have 13k deposit, buying house from parents for 210k, valued at 220-230k.
I have one default from April 2010 so due to come off report in 2 months time. Value was £380.
We passed all the first checks for Natwest, had a mortgage in principal (I know this doesn't mean much now), pre-approved for loans etc. We had a meeting last week and passed all affordability checks and the mortgage adviser was confident in our application, at the last stage after a 2 hour long meeting we were declined, the actual reason wasn't specific but it was down to my credit rating, i.e they couldn't pin point the actual cause.
We were told that each application you make that carries out a "hard" credit search that is then declined affects your credit rating further, this doesn't help!!
We are in the stages first stages of talking to a broker who has asked for copies of our Credit reports to find out if they have a lender before proceeding.
It's well worth doing credit reports with both Experian and Equifax to see what your score is. Mine was fairly low whilst my partners is excellent, even though mine reads perfectly for the last 4 years, last missed payment 71 months ago etc, it still came down to the default.
I have read it can help to contact the company that the default is with, if the account has been settled they can add notes to each entry, or they can be removed if there was an error.
Sarnie, I've seen your name mentioned a few times with regards to mortgages, do you have any pointers for someone in our position?
Cheers
James
Spragnut said:
We were told that each application you make that carries out a "hard" credit search that is then declined affects your credit rating further, this doesn't help!!
Not relevant to this thread but relevant to this point.In 2004 I was looking to buy a VX220, which was tricky to find a decent example with the right spec within my price bracket. I applied for a loan with RBS, but did not take out the loan as I had not found the car. The loan was approved at 6.5% APR (from memory). Six weeks later, I found my car and needed to reapply for the loan.
All good, until I noticed the rate had increased to 12.9% APR. This obviously meant higher repayments, so I looked at other providers - all were quoting rates above 12% - primarily I believe because I was destroying my credit rating with each new application.
Eventually, I decided to add the sum to my mortgage with Nationwide. (Incidentally I paid the amount off over the same term and not 25 years or so!)
I then wrote to RBS complaining, stating that it was impossible to plan for my financial future if they continued like they did. To my surprise, they reimbursed me £981! I still did not take out a loan with them......
I am unsure of the legality of decreasing a credit score based on number of applications as it does not allow you to shop around (and ensure you get the money and rate) plus does not allow individuals to plan for their financial future. Although anything is probably legal within our banking industry by the sounds of it.....
Mike
mike9009 said:
I am unsure of the legality of decreasing a credit score based on number of applications as it does not allow you to shop around (and ensure you get the money and rate) plus does not allow individuals to plan for their financial future. Although anything is probably legal within our banking industry by the sounds of it.....
Mike
A few points from the above posts;Mike
1) Reference the "hard credit searches and declined outcomes".....the outcome of the search is not relayed to your credit file so other lenders do not know the outcome, just that you have applied. If you apply for credit multiple times in a short space of time, the assumption is that you are being declined hence the continued applications, hence your "score" decreases
2) With regards to the above quote, the golden rule is; don't apply for credit until you actually need to utilise it. Don't apply for a loan till you have found a car to buy, don't apply for a mortgage AIP until you have found a property to buy etc etc. Don't apply for credit "just to see if you will get it"........
Sarnie said:
mike9009 said:
I am unsure of the legality of decreasing a credit score based on number of applications as it does not allow you to shop around (and ensure you get the money and rate) plus does not allow individuals to plan for their financial future. Although anything is probably legal within our banking industry by the sounds of it.....
Mike
A few points from the above posts;Mike
1) Reference the "hard credit searches and declined outcomes".....the outcome of the search is not relayed to your credit file so other lenders do not know the outcome, just that you have applied. If you apply for credit multiple times in a short space of time, the assumption is that you are being declined hence the continued applications, hence your "score" decreases
2) With regards to the above quote, the golden rule is; don't apply for credit until you actually need to utilise it. Don't apply for a loan till you have found a car to buy, don't apply for a mortgage AIP until you have found a property to buy etc etc. Don't apply for credit "just to see if you will get it"........
Why did RBS reward me so handsomely?
mike9009 said:
Sarnie said:
mike9009 said:
I am unsure of the legality of decreasing a credit score based on number of applications as it does not allow you to shop around (and ensure you get the money and rate) plus does not allow individuals to plan for their financial future. Although anything is probably legal within our banking industry by the sounds of it.....
Mike
A few points from the above posts;Mike
1) Reference the "hard credit searches and declined outcomes".....the outcome of the search is not relayed to your credit file so other lenders do not know the outcome, just that you have applied. If you apply for credit multiple times in a short space of time, the assumption is that you are being declined hence the continued applications, hence your "score" decreases
2) With regards to the above quote, the golden rule is; don't apply for credit until you actually need to utilise it. Don't apply for a loan till you have found a car to buy, don't apply for a mortgage AIP until you have found a property to buy etc etc. Don't apply for credit "just to see if you will get it"........
Why did RBS reward me so handsomely?
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