Defaults on your credit file, does this mean you can’t get a mortgage? Absolutely not! Nowadays there are plenty of lenders who can offer people mortgages even with defaults within the last year! Whilst defaults are a common reason for declines on the high street, there are several specialist lenders who can provide solutions for people with defaults.
Whilst lenders aren’t throwing money around for fun like they were back in 2007, lessons have been learned and as a result the market has never been stronger with solid foundations with an ethos built on responsible lending. It may have taken time for lenders to loosen the shackles on who they will lend to, but in the last few years, the criteria is changing at an extraordinary rate.
The best way to see what is available to you is to check your credit report (free trial available from here). Remember to put a full six year address history in so all information will be accurate and be pulled through. Once you have the reports, send them to your advisor. They will know exactly what they are looking for and will be able to establish where they are placing your mortgage very quickly after seeing this.
Another common question regarding defaults is if it would help if the defaults were satisfied. The short answer is no. Lenders will typically be looking at default registration dates and amounts and not any satisfaction dates. Whilst satisfying a default may improve your credit score overall, this is not what the lenders will be looking at.
So you’ve established you can get a mortgage but how much deposit do you need? This again varies between lenders and the forever changing criteria but it’s possible to get a mortgage with just a 5% deposit if the defaults are over three years old. With defaults over two years old, you will require a 10% deposit. With defaults within the last years, typically you will need a 15% deposit. However, if you look down the government’s new build help-to-buy scheme, you will again just need a 5% deposit, even with defaults within the last year.
If you’d like to find out more, please leave an enquiry using our form and we’ll put you in contact with a suitable specialist advisor.