Can we get a mortgage with a small default?


Pete Mugleston

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Hi , the application will be joint for myself and my husband. We have two children age 2 and 5 yrs, are both employed - salaries £15,600 and £8,000. We currently receive working tax credit of £120 a week. No outstanding current debts. I have had history of bad credit although it is no longer on my credit report, all that remains is a satisfied default from 01/13 for £83.

We are looking to purchase a property in around October this year, we have not found one as yet. Looking for approx property value of £86,000 with a 10% deposit.

Carol in Carlisle, Cumbria. Enquiry date: 24/08/2013

Hi Carol,

I think it may well be possible for you to be approved for a mortgage, but because the default still showing on your file is so recent (within the last 12 months), you may need more deposit. It really depends on the details to your credit file, principally the date the default was registered and on what type of account the credit was (mobile phone/ credit card/ loan etc.). If you can send us a copy of you and your husbands credit file, I can have a look through and begin to match it up with potential lenders who may consider your application.

The good news is that your default is a relatively small one, so although lenders who use automated systems that require a higher credit score may decline you, it may be that a lender who manually underwrites cases would accept. It really depends on the case as a whole.

Basically the lenders who consider 90% mortgages have strict criteria and tend to only accept customers with a clean credit file – so you’d have a much better chance with lenders that are more flexible with their credit history criteria – these usually require at least a 15% deposit.

I hope this helps.

Many thanks,

Pete

 


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