Mortgage After Defaults

Richard Crow talks us through Mortgages with a Debt Management Plan as part of our bad credit mortgages series.

Can I still get a mortgage with a Default?

It’s not as simple as a straight yes or no, because all lenders have their own criteria around Defaults. These range from how long ago the defaults were registered, the amounts registered as well as the type of creditor and whether or not they are satisfied.

Although you may struggle to find a high street lender to take you if you have Defaults, there are lenders that specialise in this.

How old does a Default have to be for you to get a mortgage?

We work with up to ninety-plus lenders, some won’t take you if there’s a Default registered in the last six years, whilst we have access to lenders that will accept you after three to twelve months. It won’t be the cheapest of interest rates, but that doesn’t always matter to the client.

Can I get a mortgage with multiple Defaults?

Most lenders in the adverse credit market tend to ignore any defaults over three years old, so you could have any number, it doesn’t really matter. So the amount of defaults can vary dependent on the lender’s criteria and when they were registered.

What is a Satisfied Default?

A satisfied default is simply where you have paid the amount owed off in full. Sometimes people can do deals with creditors and get the debt cleared for a lesser amount than what is owing, which is shown as a partially Satisfied Default on credit reports.

Can I get a mortgage with outstanding debt?

Absolutely, most people today have some forms of debt. This may include loans, credit cards or car finance. The thing that people don’t always realise is that things like childcare and child maintenance can affect affordability. Nonetheless, providing you meet lenders’ affordability, it’s completely acceptable to have debts and still get a mortgage.

What if I have other credit issues as well?

Missed payments are a common issue that we see, the usual cause is that people do not automate their credit, so they may be mispaying a store card or a credit card because life gets in the way, and I understand that that happens.

The trouble is, this can affect your ability to get a mortgage, particularly if it’s a common habit. Setting up a direct debit to make sure minimum payments are taken care of ensures you won’t miss any payments in the future, helping keep your credit file in check. Even with things like IVAs and bankruptcies, providing you’re meeting the lenders criteria, it’s possible to get mortgages.

How much can I borrow if I have Defaults?

It all depends on the normal lending rules of the lenders that will accept you. It’s based upon your income and what financial commitments you have. Lenders will base your borrowing on these factors and providing your credit file fits, generally lend four to four and a half times your expendable income.

How could Richard Crow Financial help?

If you’ve got bad credit, you’re going to find it far easier getting a mortgage by using a Mortgage Broker. We have great experience in this situation and can look at your credit file and pair you with a lender that we know has a very good chance of taking you. We save you time, money, and of course heartache.

Most of all, we don’t judge you. We empathise with people and if we cannot help, we always leave them with a personal blueprint of what they need to do moving forwards to get where they want to be.

Your property may be repossessed if you do not keep up repayments on your mortgage  or any other debt secured on it.