The prospect of applying for a mortgage with a default on your credit file can be a daunting one. You may be told by High Street lenders that’s its difficult or even that it’s simply not possible. However, with the help of a specialist adviser, you can make sure that your application is viewed by a lender that is comfortable lending people with defaults, so there is no reason why you can’t successfully apply.
Getting a mortgage with a default is possible when you use the services of an adviser who specialises in this market. They will help you submit your application into one of the many specialist mortgage lenders in the UK market who offer home loans for clients with a default.
Can you get a mortgage with a default?
Our advisers work with clients on a daily basis who have settled, paid, satisfied defaults, small and large on their credit file. This includes people who are:
- First time buyers
- Existing home owners wanting to re-mortgage
- Buy to let owners with defaults
Since the global recession of 2008, the number of defaults registered in the UK has risen significantly, however the number of mortgages available to lend to people with defaults has also increased.
Mortgage lenders understand only too well that people with defaults on their file may still represent a good mortgage customer, meaning there are specialist companies in the market prepared to lend.
In fact, at the time of publishing this guide, there are over 50 lenders in the UK who will consider lending to people with defaults.
Using an adviser who has access to these lenders, understands their criteria, and knows how to apply to them, could help you save time and money.
To get started, complete an enquiry form or pick up the phone to talk with one of our friendly team members.
Why use our advisers for help in obtaining a mortgage with a default?
We like to keep things simple but professional, and that approach extends into the panel of advisers we have selected to work with our clients with defaults.
All of our advisers have an in-depth understanding of the mortgage market and have helped many clients secure mortgages when they have defaults on their credit file.
This expert knowledge of the market, combined with access to a large range of UK lenders prepared to offer mortgages to people with defaults, means that you will be in good hands.
I have a default on my credit report, so can I get a mortgage?
The first steps to getting a mortgage with a default on your credit file is to get a copy of your credit report. We recommend the Equifax and Experian services, both of which you can pay a small fee to receive a comprehensive report.
However, both of these reference agencies often offer a free 30-day trial that you can take advantage of to get a copy of your latest credit report – and both agencies tend to be used by the majority of lenders for referencing.
If you have not seen your credit report before then you may find it a little confusing or difficult to understand. Don’t worry though as your adviser will be on hand to talk you through the report and explain in plain English what the information means. The information contained within your credit report will assist your adviser in being able to recommend the right lender and the options you have available to you.
Are all defaults the same?
There are many reasons why defaults can occur, and they can be issued by many different companies.
Depending on why your default was issued and by who, will have an impact on how lenders view your application.
As an example, if it was a default on your mobile phone bill, then that will be viewed differently than a mortgage default.
Our advisers have an expert understanding of how the UK lenders operate in terms of accepting applications from people with default notices and they will be able to help you submit your application to the right lender for your personal circumstances.
Will I get a mortgage with a satisfied default?
Yes, you can get a mortgage with a satisfied default.
The satisfied status of your default will serve to improve your credit history, although it will not necessarily affect the lenders decision. The date of registration is of more importance to the lender.
Many mortgage lenders do not run a credit score system and base their decisions primarily on the specific credit details on the report. Based on the time period from being settled, you may be placed into a different mortgage tier that can affect your rate and deposit amount needed.
Can I get a mortgage with a settled or paid default?
Similar to the above statement, each lender will have a different level of criteria on how defaults are viewed.
Some lenders may offer improved terms if defaults are settled, although this is not always the case with every lender.
Settling or paying defaults is the same thing in principle, and doing so should improve your credit profile.
Can I get a high street mortgage with a default?
It can be done, but it will depend on when the default was registered (for example, 5 years ago), how much it was for, and who it was with.
These combined factors can affect your ability to be accepted by high street lenders and banks, so you could be better off using our adviser to do the market research on your behalf.
Whether you are approved by a high street lender or a niche lender, your adviser will research the market in order to find the most appropriate mortgage for you.
Many niche lenders are very competitive with their lending terms.
Can I get a mortgage with two defaults or more?
The answer to this is yes, however the more defaults you have accumulated, the less choice you will have, and you will probably find that you will need a larger deposit. However your specialist adviser will clearly explain the options available to you so that you can make a clear decision on how you wish to proceed.
Do you need more of a mortgage deposit with defaults on a credit file?
This will depend on the age, amount, and reason for your default. Your adviser will be able to advise on the size of deposit you require once they have discussed your circumstances with you.
There are some lenders our advisers work with you can still offer a mortgage deal based on a 5% deposit, however, depending on the severity of the defaults on your credit file, other specialist lenders could request a deposit amount of at least 15%.
Can I remortgage with a default?
Yes, you can. The rates available to you will depend on many factors including the loan to value that you are requesting. For example, if somebody wants to borrow £100,000 against a property valued at £200,000, then that represents a loan to value of 50% which will be viewed as a lower risk then somebody wishing to borrow £180,000 against the same property, a loan to value of 90%.
Typically, the lower the loan to value the more options will be available to you.
Can I get a mortgage if defaults are not the only thing registered on my credit file?
Yes, there are many lenders and many options available within the mortgage market. The key is to use an expert adviser to make sure that all options are explored. The final answer will also be down to the circumstances of each individual applicant and will be based on many factors, for example, have you had any other credit issues in the past.
There are lenders that can accept a mix of credit issues.
If I have had default how much can I borrow on a mortgage?
Your income and outgoings affect the amount you can borrow. As a rule of thumb, if you can demonstrate that you have sufficient affordability after all other commitments have been considered, then a lender will be comfortable.
Your mortgage adviser will be able to give you a professional opinion on this before approaching mortgage lenders directly so that you have an idea.
How soon after a default can I obtain a mortgage?
This will depend on the amount of defaults and the reasons behind them.
There is no quick answer on this as it is about understanding your existing and then matching this against different lenders criteria.
Once you have been paired up with an adviser from our panel, they will be able to offer you a timeframe and tell you what you need to supply to get things moving quickly.
How to get started
To find out whether you can still get a mortgage with a default, call a member of our friendly team today, or complete an enquiry form.
Once we have taken some basic information from you, we can then introduce you to one of our mortgage experts who are specialists in this type of mortgage arrangement.