Mortgage with defaults

Getting a mortgage with defaults on your credit file can be a challenge. Many lenders won’t consider your mortgage application if you have a history of missed repayments. However, there are other lenders that will be willing to look at your financial situation in more detail before making a decision.

Getting a mortgage with defaults

Defaults on your credit file are one of the most common reasons why many lenders decline mortgage applications. But there are plenty of bad credit lenders that will still consider your application. These lenders have helped people get mortgages even if they have CCJs or been made bankrupt.

If you are in this position, using a broker with a good knowledge of the bad credit mortgage market will help you get the best mortgage deal.

What is a default notice?

A default notice is a formal letter sent by your creditor after a number of missed repayments and will typically include:

  • The terms you have broken in your agreement
  • How much you need to pay
  • The date you will need to make this payment by
  • The consequences that will occur if you fail to comply
  • The length of time you have to respond to the notice (typically within 14 days)

A default can remain on your credit file for up to 6 years and will be visible to anyone you make a credit application with during this time.

When can you apply for a mortgage?

Satisfying a default (paying it off) can help to increase your chances of mortgage approval. Although you’ve missed repayments, lenders will be able to see that you’ve done all you can to rectify the situation. Paying this debt, however, won’t remove the default from your credit file and it will remain for 6 years from the date of the default.

Bad credit lenders are most interested in your recent credit activity, so applying for a mortgage soon after satisfying a default is not a good idea. The older the default, the smaller the impact will be on your mortgage application.