Subscribe to our Feed
Mortgage with defaults
If you have defaults registered against you and want a mortgage we could help. In today's mortgage market, getting a mortgage with defaults is becoming increasingly difficult so its important to speak to a broker who understands the mortgage market and understands which lenders will allow a mortgage to complete with defaults registered on your credit file.
Getting a mortgage with defaults
Getting a mortgage with defaults on your credit file may require a little more ground work than a normal high street mortgage - you will be well advised to get hold of your credit report to ascertain exactly what defaults you have before applying for a mortgage and then letting your mortgage broker explain what the defaults mean in real terms and how they can affect your mortgage application.
For instance its very unlikely you will get a approval if you need a mortgage for more than 90% loan to value and have defaults registered against you. You should be able to apply for a 90% mortgage and should not have any problem getting a mortgage with defaults for 85%, 80% or mortgages below 75% as these will typically ignore any defaults registered on your credit file.
How and why will defaults effect my mortgage?
When you struggle paying loans and other debts and miss payments, the lender has the right (if you miss numerous payments) to register a default on your credit file.
A default lets potential borrowers know that you have not met your normal, contractual monthly payments and as such helps them to ascertain the likely hood of any new payments being maintained. Obviously its not just your defaults that go into determining if a lender will approve your application - they take many factors into account and defaults are just one of them.
A mortgage lender that allows defaults to be registered on your credit file will have mortgage products specifically designed to cater for this. They are likely to have slightly higher interest rates than normal high street mortgages and will probably have higher lender application fees.
It is important to remember that, whilst getting approved for a mortgage with defaults registered against you will allow you to get a mortgage with the defaults you should make sure a mortgage is affordable - you should be sure that you can afford to repay the defaults and the new mortgage payments as the last thing you want is to get a mortgage approved and then have to worry about paying your mortgage due to the defaults.
A debt management plan or something similar could help with this as it will allow you to restructure your debts so they are affordable whilst ensuring you can maintain essential payments such as your mortgage, even if you have defaults registered on your credit file.
