MORTGAGES WITH A DEFAULT

A default is a notice that is served if you miss a payment to a creditor. You have to miss between three and six payments or enter arrears by not making the full payment for a notice to be served. Default notices are only eligible if the Consumer Credit Act 1974. regulates the debt.

Multiple actions can be demanded with the delivery of a default notice. These include:

• Making the payment in full
• Passing your debt onto a collection agency
• Beginning court proceedings
• Starting a process of repossessing assets associated with the agreement

All default notices must be responded to immediately.

Some lenders are unlikely to approve a mortgage application if defaults are involved; however, securing a default mortgage is possible! Our specialists can help. While mortgage approvals with defaults are not as competitively priced, they are still available.

The mortgage process includes opening your bank statements to lenders so that they can gain an understanding of where your money is allocated. People with adverse credit, such as a default, will be considered a higher risk, which will reduce the amount that lenders are willing to offer. Defaults make it more difficult to obtain a mortgage, but not impossible.

Speak to us today, if we can’t help, it’s not possible.

Defaults have a place in your credit history, and will do for six years, but will count against you for a minimum of one year. Defaults are more serious than simple late payments when it comes to applying for a mortgage. The more recent the default notice, the more difficult it may be to obtain a mortgage. That is where our team can help.

Having a default, or multiple defaults, against your name makes it unlikely that high street lenders will approve your mortgage application. But there are plenty of lenders off the high street that may. The age and size of the defaults, as well as your income and outgoings, will be considered when you apply for a mortgage. We can put you in touch with lenders more likely to approve your application.

The amount you will be able to borrow will vary from lender to lender. Lenders have their own method of calculating both risk and the amount they are willing to lend. The length and size of the default, as well as your income and outgoings, will be considered. Explain your situation to our team to gauge a more accurate idea of how much you may be able to borrow.

Yes, while some mortgage lenders are more relaxed than others, the type of payment you missed will impact the way a lender sees the level of risk. Our team can discuss the severity of your default and offer advice.

After six years, the default should be removed from your profile whether you have completed repayments or not. Therefore, mortgage lenders will no longer be able to see the default through the application process. However, this does not mean that you can stop making repayments after the six-year period. You should continue paying off your debt.

A fresh default will have a significant impact on your credit score. Also, bear in mind that defaults are brought against individuals due to missed payments; and these missed payments will lower your credit score separately. The good news is that the impact on your credit score will lessen over time.

Defaults will naturally be removed from your profile after six years. The only other way to remove a default is to prove it was added to your profile in error. If you pay off the debt within six years, the default won’t be removed; however, it will be considered ‘satisfied’, which looks better to lenders.

If you pay off your default, it will stay on your record, but it will increase your chances of gaining a default mortgage. With that said, the timing of your default is more likely to have an impact.