While it is true that mainstream lenders prefer a squeaky-clean credit report, there are specialist lenders out there who can offer you a mortgage when you have a history of defaults. Follow our guide below to understand what different factors influence a mortgage with defaults.
It is certainly a possibility but as with all adverse credit it is best to seek advice from a specialist. Our superheroes have helped many customers with a history of defaults before so you can trust them to give you the right mortgage advice. There are many bad credit mortgage providers out there who can give you a mortgage with defaults in your history but your approval will depend on their other eligibility and affordability requirements.
Lender’s criteria may be stricter if you have a default and some may send your application to an underwriter for approval before they figure out how much they can lend. Mortgage providers will multiply your salary by a certain amount to determine how much you could borrow, but defaults may restrict this method. In general, the more defaults you have and how recent they are increase the risk.
We know no one wants to default on their payments and that it is usually the result of financial hardship, or it happens unknowingly by accident. A lot of the time this means that one person can have multiple credit issues on their file and although multiple negatives can make getting a mortgage harder it is still possible. But due to the technicalities this imposes it really is important that you seek guidance from an expert. We are ready to help you.
Some mortgage providers view defaults as all the same and if you have one on your file within a certain time frame it may be an automatic decline. But, other lenders examine different defaults in diverse ways.
For example, they may be willing to overlook a default on a missed phone bill as they know this is often a small amount and may be the first financial agreement you take out when you are younger and less financially savvy. But defaults against mortgages or secured loans are taken the most seriously.
If your default is satisfied you may be less restricted with mortgage lenders and rates than if the defaults are unsatisfied as you are deemed as less of a risk. But there are many lenders out there who are more flexible with defaults and will accept your application whilst it is unsatisfied. These lenders are usually more interested in how much time has passed since your default was registered.
The table below will help you understand the eligibility criteria for a mortgage with defaults. It is worth bearing in mind that it is possible to secure a mortgage with the government help to buy scheme with defaults on your file, which could help those only able to raise a 5% deposit.
| Lender | Max LTV | Date default was paid | Age of default | Other adverse credit history | |
| A | 75% | Does not have to paid | Inside 6 months can be OK (although some can consider more recently) | ||
| B | 80% | Does not have to paid | Inside 6 months can be OK (although some can consider more recently) | Possible | |
| C | 85% | Does not have to paid | inside 6 months can be OK (although some can consider more recently) | Possible 3-4 missed payment in last 2 years | |
| D | 90% | Does not have to paid | 12 months (although some can consider more recently) | Possible Can be within 2 years if satisfied 1 year ago. Can be ignored if less than £300 and satisfied. | |
| E | 95% | Does not have to paid | 3 years (although some can consider more recently) | Possible May accept 1-2 missed payments in last 2 years |
This is an indication only at the time of writing. You will only ever get a true representation of what a mortgage could look by enquiring with our team of experts.
We love assisting clients, especially those who have had difficulty finding the best deals elsewhere.
I applied for a mortgage from another organization after seeing an excellent offer online, but my application was declined due to my credit history. I am grateful to MoneyNest for connecting me with their broker, who discovered out what the problem was and now I am a client of theirs 🙂
I had a bad credit history and didn’t know how to apply for a mortgage. The superhero advisors from MoneyNest came into my life when they matched me with an agent who found the perfect lender willing to take on such risk, giving us both hope that there are still opportunities out here!
There are a lot of considerations that go into a mortgage application so it is important you and your mortgage advisor work together to get it right first time.
Make an enquiry for a free, no-obligation chat and we’ll match you with a broker experienced in helping other customers in similar circumstances
The way each lender works varies a lot. We have put together a list of what to expect from some of the well-known mortgage providers. Please note we have gathered this information from helping customers in the same situation as you, so you can put your faith in our superheroes to help you too.
The list below shows some examples of flexible lenders who could accept your mortgage application if your default is unsatisfied:
These lenders are only a small snapshot as to what is out there. You could have a scenario that does not fit into the above so get in touch and we will guide you through how you can secure a mortgage with defaults.
The rate that you will be offered will be determined by your situation. The table below indicates rates based on a mortgage amount of £150,000 over 30 years as of November 2021. It is best to seek advice from the superheroes we have on standby to find a deal for your circumstances.
If your credit issues are holding you back, our credit expert hero’s are here to set you free!
