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First Time Buyer with Defaults

Posted on 17 January 2012 by Paul


My partner and I are looking to buy our first house.  We're living with my parents and its tough! 

The problem is I have 2 defaults against my name, both satisfied and both over 1 year old, they will fall into the 2 year bracket in April and September respectively.  We have a 20% deposit but are concerned about these defaults.  My partner has an excellent credit rating and we earn almost £70k between us.  Do you think we stand a chance of a mortgage in the next few months?

Paul

I think finding a mortgage is going to be tough, but not impossible.  All lenders are going to want to know why the defaults occurred and what change there has been in your circumstances to prevent them happening again.  You must declare the defaults because they will show on your credit file for the next 4 - 5 years and failure to do so would amount to mortgage fraud.

If you haven't already checked your credit records with one of the 3 main agencies then you should do so now:

Equifax Ltd  Callcredit Plc   Experian Ltd

Credit File Advice Centre Consumer Services Team Customer Support Centre

PO Box 1140  PO Box 491   PO Box 8000

Bradford Leeds     Nottingham

BD1 5US  LS3 1WZ  NG80 7WF

0844 335 0550  0870 060 1414     0844 481 8000

www.equifax.co.uk  www.callcreditcheck.co.uk  www.experian.co.uk

This will give you a good idea of how much trouble your defaults are going to cause because all lenders do a credit check and the majority rely on a credit score to decide who to and who not to lend to.  The overall decision will depend on how much you want to borrow in comparison to your income and the property value.  I note that you have a 20% deposit saved and if there is any way you can increase this to 25% I think your chances would be improved.

Once you have the details from the credit reference agency I believe that we can help you.  We have extensive contacts with Lenders who will underwrite your application on it's merits and not rely on a credit score to make a decision for them.  Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help you find the right mortgage for your situation.

Peter

 

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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