Can I Get a Mortgage with a Default?
Absolutely! Here at Mortgage Bridge, we help people every day who have defaults on their credit history. While high-street banks might not be keen, there are plenty of specialist lenders who look at things differently. Getting a mortgage with a default on your credit report isn’t as impossible as it might seem – you just need to know where to look.
What Exactly is a Default and How Does It Impact My Mortgage Chances?
A default happens when you miss several payments to a creditor, like a loan provider, mobile phone network, or utility company. If you don’t keep up with payments, the creditor may register a default on your credit file, which tells future lenders you’ve had financial trouble in the past.
Defaults fall under adverse credit, which can make borrowing trickier – but not impossible. How much it affects your mortgage options depends on things like how long ago it happened, how much it was for, and whether you’ve had any issues since.
How Long Will a Default Stay on My Credit Report?
Defaults stick around on your credit file for six years from the date they’re registered. During this time, they can make getting credit (including a mortgage) more challenging. But as time passes and you keep your finances in check, the impact of a default lessens.
Even after six years, some lenders may ask about past credit issues. But, does an old default affect my chances of getting a mortgage? The further in the past it is, the less it tends to matter.
Will a Default Stop Me from Getting a Mortgage?
Not necessarily! Some lenders are stricter than others, but many understand that life happens. Here’s what they consider:
1. What Kind of Default Do You Have?
Some defaults carry more weight than others. For example:
- Mobile phone defaults are usually seen as minor by specialist lenders. Some mortgage lenders ignore mobile phone defaults entirely.
- Utility bill defaults might not be a big deal if they were due to a dispute rather than financial difficulty.
- Credit card and loan defaults are more serious but still manageable with the right lender.
- Mortgage or secured loan defaults are considered the most serious and can limit your options.
2. How Soon After a Default Can I Apply for a Mortgage?
The more time that’s passed, the better. Most lenders prefer at least 12 months between a default and a mortgage application, but some specialist lenders may accept applications sooner.
3. Does the Amount of the Default Matter?
Yes! A £100 default on a mobile phone bill isn’t the same as a £5,000 personal loan default. Lenders tend to be more lenient with smaller amounts, especially if they’ve been settled.
4. Can I Get a Mortgage with Multiple Defaults?
It’s possible! Getting a mortgage with multiple defaults may limit your lender options, but specialist lenders exist to help in these cases.
5. Do I Need to Pay Off a Default Before Applying for a Mortgage?
Not always. While some lenders prefer defaults to be settled, others will still consider your application even if the default is unpaid.
How Can I Boost My Chances of Getting a Mortgage with a Default?
1. How Often Should I Check My Credit Report?
Before applying for a mortgage, check your credit report through Experian, Equifax, or TransUnion. This helps you:
- Spot errors that might be dragging your score down.
- Understand where you stand before approaching lenders.
- Monitor improvements over time.
2. Should I Work with a Specialist Mortgage Broker?
Yes! A broker who specialises in adverse credit mortgage products (like us at Mortgage Bridge!) can match you with lenders who are open to working with people who have defaults.
3. How Much Deposit Do I Need for a Mortgage with a Default?
The bigger your deposit, the better your chances. How much deposit do I need for a mortgage with a default? Generally, at least 10-15% is ideal, but some lenders may accept less.
4. What Financial Habits Can Help Me Get a Mortgage?
Lenders want to see that you’re financially stable. That means:
- Paying bills on time.
- Reducing existing debts where possible.
- Avoiding further missed payments.
5. Can Applying for a Joint Mortgage Help?
If your credit isn’t great but your partner’s is, can I get a mortgage with a joint applicant if I have defaults? Absolutely – their stronger credit profile could improve your approval chances.
6. Will Explaining My Default to Lenders Make a Difference?
Yes! If your default was caused by something like redundancy, illness, or a dispute, explaining this to a lender can sometimes help your case.
What Are My Mortgage Options If I Have a Default?
1. Can I Get a Mortgage from a High-Street Bank with a Default?
Probably not, unless the default was small and happened years ago. Most high-street banks have strict criteria.
2. Do Specialist Lenders Accept Mortgage Applications with Defaults?
Yes! These lenders focus on applicants with bad credit history and provide more flexible options.
3. Are There Specific Mortgage Products for People with Defaults?
Yes, adverse credit mortgage products exist to help those with defaults get on the property ladder.
4. Can a Guarantor Help Me Get a Mortgage with a Default?
Yes! If you have a family member who’s willing to act as a guarantor, some lenders may be more likely to approve your mortgage application.
Final Thoughts
Having a default doesn’t mean you can’t get a mortgage. Which lenders accept mortgage applications with defaults? Many specialist lenders do! By working with an experienced mortgage broker (like us at Mortgage Bridge!), checking your credit file, and demonstrating financial stability, you can boost your chances of approval.
If you’re wondering how a default affects first-time buyers applying for a mortgage, or need expert guidance on your mortgage options, get in touch with us today – we’d love to help!le. It is untrue that checking your credit score will leave a mark on your file. Lots of credit checking sites will let you check your file without affecting your actual credit history.