Mortgage with Defaults

Steven Neale
By Published On: March 6, 2023Last Updated: July 11, 2024

Can I get a mortgage with a default?

Yes you can. It is possible to get a mortgage with one or more defaults on your credit file, but it is something which should be approached with great care. Many high street lenders will reject mortgage applications where defaults are present, so understanding which lenders to approach is key. Having too many mortgage applications rejected will further damage your credit rating.

I work with several lenders who will offer a mortgage to applicants with one or more defaults. Each of these lenders will have their own criteria based around how many defaults there are, how much they are for, and whether they are settled.

How will a default affect my mortgage application?

Having a default when applying for a mortgage will be a red flag for most high street lenders, and likely result in a rejection. There are several specialist lenders who will accept defaults on a mortgage application. Knowing which lenders these are, and what the specifics are around defaults within their lending criteria is key.

A specialist adverse credit mortgage advisor like me will have a complete list of lending criteria and will match you with a lender who accepts the number of and kinds of defaults you may have.

Do you have to declare a default on your mortgage application?

Yes, absolutely. Any debts or bad credit marks must be declared when applying for a mortgage. It is incredibly important, and a legal requirement, to be completely truthful when applying for a mortgage. In addition, the lender’s credit checks will almost certainly identify any debts registered to you, including if any defaults have been registered against you.

How long after a default can you get a mortgage?

As with most bad credit issues, the longer ago your default was the better. However, I work with several lenders who will accept applications from those which have much more recent defaults, depending on the circumstances.

For those with defaults registered more than 2 years ago, the pool of lenders increases fairly substantially. In addition, if these defaults were for low amounts (<£250) your chances of success will be even greater.

The timing of your default will not only impact your chances of success, it will also be a key factor in the type of mortgage you are offered in terms of the required deposit and interest rate. I can talk you through your options and help you decide when might be the best time to apply for a mortgage with a default.

Does your default need to be cleared before you can get a mortgage?

No they do not. Although clearing the default debt may help your application, the main issue is the fact that you actually had a default in the first place. A lender will likely look at an outstanding default and a cleared default in the same way – the issue is you defaulted on a credit agreement.

What is the lending criteria for a mortgage with defaults?

Every mortgage lender will have their own criteria for mortgages with defaults. Some will allow very recent defaults, even if they’re not cleared. Others will insist any defaults are few in number, registered several years ago, and insist that they are cleared.

The same is true for general lending criteria, such as minimum income, employment status, property type, and criteria around other credit issues not relating to a default. 

I work with a wide range of adverse credit mortgage lenders and can quickly match your specific circumstances to a lender’s criteria, ensuring you only apply with lenders where you meet their application criteria, and avoid spiraling into numerous application rejections.

How much can you borrow with a Default?

Up to 95% if the defaults were registered over 18 months ago and 100% if you are looking for a Shared Ownership mortgage. With the majority of the adverse credit lenders, any defaults registered over 2 years ago can be ignored.

The important thing to remember when looking at your credit file is the date the defaults were registered and the amount. When they were cleared is important to some lenders as they will not lend unless they have been paid off before making a mortgage application but as you can see below, I have a lender that will allow 5 defaults in the past 2 years for any monetary amount. The majority of the lenders I deal with do not expect defaults to be cleared so save your money for a deposit.

What deposit will you need for a mortgage with a Default?

The LTV and required deposit required will largely come down to the specific circumstance of your default, as well as other factors on your application. Generally, the longer ago the default was registered on your credit file, the lower the required deposit will be. Whether the default is cleared will also play a factor in the size of the deposit required.

Different lenders will have their own rules around required deposits for mortgages with defaults, but the figures below is what you might typically expect to see:

Deposit LTV Default Status
5% 95% Defaults registered over 18 months ago
10% 90% Defaults registered over 3 years ago
15% 85% Unlimited defaults if registered over 2 years ago
20% 80% Maximum of 5 defaults within the last 2 years, 0 in the last 3 months
25% 75% Unlimited defaults registered over 1 year ago
30% 70% 4 defaults in the last 36 months, 0 in the last 6 months

Which lenders can provide mortgages with defaults?

There are numerous specialist lenders who will be happy to offer you a mortgage if you have 1 or more defaults. Most of these lenders will only consider applications which come via a broker, and they all have their own specific lending criteria. These are 2 key reasons to speak to a specialist adverse credit mortgage broker rather than attempting to go directly to a lender for a default mortgage.

You would typically struggle to get a mortgage from a high street lender if you have defaults, particularly if the defaults were recent and haven’t been cleared.

Getting a Help to Buy mortgage with Default

I work with several lenders who can offer a Help to Buy mortgage with defaults. The lending criteria will be largely similar to that of a standard mortgage with defaults.

For more information on getting a Help to Buy mortgage, see the Help to Buy with bad credit guide or get in touch.

Getting a Right to Buy mortgage with a Default

If you’re looking to buy your council house through the Right to Buy scheme and have 1 or more defaults, I work with several lenders who will consider your application. These lenders each have different criteria, so when and why you got the default will need to be discussed.

Take a look at our dedicated Right to Buy mortgages with bad credit guide for further information, or get in touch and I can discuss your specific circumstances and let you know whether a lender is likely to accept your application.

Getting a Shared Ownership mortgage with a Default

Shared Ownership mortgages offer a way of getting onto the property ladder with smaller deposits. I work with a few lenders who will consider mortgage applications for Shared Ownership mortgages where the applicant has 1 or more defaults.

If you have a default and are considering a Shared Ownership mortgage, see our dedicated guide to Shared Ownership mortgages with bad credit, or get in touch to discuss your requirements.

How a mortgage advisor can help with Defaults

I understand exactly which lenders will accept mortgage applications from those with 1 or more defaults, and the exact lending criteria for each. Once I’ve discussed you individual circumstances with you, I can match that with a lender to find you a mortgage.

I have decades of experience in helping those with defaults to get a mortgage, and ensuring they get the application right first time, as well as getting the best deal available for them. 

For more information or to discuss your application, please call me on 01494 526 400 or complete my online enquiry form today.

FAQs

A default is registered on a person’s credit file if they default on the payment for a debt. A lender will typically try to resolve the issue before reaching the default stage, but if this isn’t possible, a default will be registered. 

A default will stay on your credit file for 6 years after it was first registered. To limit this time as much as possible, it’s worth checking your credit file to confirm the default has been registered on the correct date, and not several months later or differently with different credit reference agencies. 

Technically there is no such thing as a ‘default mortgage’ but the term can be used to describe mortgage products from lenders who have lending criteria which allows for 1 or more defaults to be registered on the applicant’s credit file.

Yes, there are several lenders who will consider applications from those looking to remortgage with or after one or more defaults. The rules and lending criteria, as discussed in this guide, will not differ too much between those looking to remortgage and those looking for their first mortgage with a default.

If your partner has defaults registered on their credit file, this can lead to mortgage application rejections from high street lenders. However, there are many specialist lenders who will be happy to provide a mortgage where a partner has one or more defaults.

Your chances of acceptance will come down to the details of the defaults, such as when they were registered and the status of them.

Mortgage with Defaults

Steven Neale
By Published On: March 6, 2023Last Updated: July 11, 2024

Can I get a mortgage with a default?

Yes you can. It is possible to get a mortgage with one or more defaults on your credit file, but it is something which should be approached with great care. Many high street lenders will reject mortgage applications where defaults are present, so understanding which lenders to approach is key. Having too many mortgage applications rejected will further damage your credit rating.

I work with several lenders who will offer a mortgage to applicants with one or more defaults. Each of these lenders will have their own criteria based around how many defaults there are, how much they are for, and whether they are settled.

How will a default affect my mortgage application?

Having a default when applying for a mortgage will be a red flag for most high street lenders, and likely result in a rejection. There are several specialist lenders who will accept defaults on a mortgage application. Knowing which lenders these are, and what the specifics are around defaults within their lending criteria is key.

A specialist adverse credit mortgage advisor like me will have a complete list of lending criteria and will match you with a lender who accepts the number of and kinds of defaults you may have.

Do you have to declare a default on your mortgage application?

Yes, absolutely. Any debts or bad credit marks must be declared when applying for a mortgage. It is incredibly important, and a legal requirement, to be completely truthful when applying for a mortgage. In addition, the lender’s credit checks will almost certainly identify any debts registered to you, including if any defaults have been registered against you.

How long after a default can you get a mortgage?

As with most bad credit issues, the longer ago your default was the better. However, I work with several lenders who will accept applications from those which have much more recent defaults, depending on the circumstances.

For those with defaults registered more than 2 years ago, the pool of lenders increases fairly substantially. In addition, if these defaults were for low amounts (<£250) your chances of success will be even greater.

The timing of your default will not only impact your chances of success, it will also be a key factor in the type of mortgage you are offered in terms of the required deposit and interest rate. I can talk you through your options and help you decide when might be the best time to apply for a mortgage with a default.

Does your default need to be cleared before you can get a mortgage?

No they do not. Although clearing the default debt may help your application, the main issue is the fact that you actually had a default in the first place. A lender will likely look at an outstanding default and a cleared default in the same way – the issue is you defaulted on a credit agreement.

What is the lending criteria for a mortgage with defaults?

Every mortgage lender will have their own criteria for mortgages with defaults. Some will allow very recent defaults, even if they’re not cleared. Others will insist any defaults are few in number, registered several years ago, and insist that they are cleared.

The same is true for general lending criteria, such as minimum income, employment status, property type, and criteria around other credit issues not relating to a default. 

I work with a wide range of adverse credit mortgage lenders and can quickly match your specific circumstances to a lender’s criteria, ensuring you only apply with lenders where you meet their application criteria, and avoid spiraling into numerous application rejections.

How much can you borrow with a Default?

Up to 95% if the defaults were registered over 18 months ago and 100% if you are looking for a Shared Ownership mortgage. With the majority of the adverse credit lenders, any defaults registered over 2 years ago can be ignored.

The important thing to remember when looking at your credit file is the date the defaults were registered and the amount. When they were cleared is important to some lenders as they will not lend unless they have been paid off before making a mortgage application but as you can see below, I have a lender that will allow 5 defaults in the past 2 years for any monetary amount. The majority of the lenders I deal with do not expect defaults to be cleared so save your money for a deposit.

What deposit will you need for a mortgage with a Default?

The LTV and required deposit required will largely come down to the specific circumstance of your default, as well as other factors on your application. Generally, the longer ago the default was registered on your credit file, the lower the required deposit will be. Whether the default is cleared will also play a factor in the size of the deposit required.

Different lenders will have their own rules around required deposits for mortgages with defaults, but the figures below is what you might typically expect to see:

Deposit LTV Default Status
5% 95% Defaults registered over 18 months ago
10% 90% Defaults registered over 3 years ago
15% 85% Unlimited defaults if registered over 2 years ago
20% 80% Maximum of 5 defaults within the last 2 years, 0 in the last 3 months
25% 75% Unlimited defaults registered over 1 year ago
30% 70% 4 defaults in the last 36 months, 0 in the last 6 months

Which lenders can provide mortgages with defaults?

There are numerous specialist lenders who will be happy to offer you a mortgage if you have 1 or more defaults. Most of these lenders will only consider applications which come via a broker, and they all have their own specific lending criteria. These are 2 key reasons to speak to a specialist adverse credit mortgage broker rather than attempting to go directly to a lender for a default mortgage.

You would typically struggle to get a mortgage from a high street lender if you have defaults, particularly if the defaults were recent and haven’t been cleared.

Getting a Help to Buy mortgage with Default

I work with several lenders who can offer a Help to Buy mortgage with defaults. The lending criteria will be largely similar to that of a standard mortgage with defaults.

For more information on getting a Help to Buy mortgage, see the Help to Buy with bad credit guide or get in touch.

Getting a Right to Buy mortgage with a Default

If you’re looking to buy your council house through the Right to Buy scheme and have 1 or more defaults, I work with several lenders who will consider your application. These lenders each have different criteria, so when and why you got the default will need to be discussed.

Take a look at our dedicated Right to Buy mortgages with bad credit guide for further information, or get in touch and I can discuss your specific circumstances and let you know whether a lender is likely to accept your application.

Getting a Shared Ownership mortgage with a Default

Shared Ownership mortgages offer a way of getting onto the property ladder with smaller deposits. I work with a few lenders who will consider mortgage applications for Shared Ownership mortgages where the applicant has 1 or more defaults.

If you have a default and are considering a Shared Ownership mortgage, see our dedicated guide to Shared Ownership mortgages with bad credit, or get in touch to discuss your requirements.

How a mortgage advisor can help with Defaults

I understand exactly which lenders will accept mortgage applications from those with 1 or more defaults, and the exact lending criteria for each. Once I’ve discussed you individual circumstances with you, I can match that with a lender to find you a mortgage.

I have decades of experience in helping those with defaults to get a mortgage, and ensuring they get the application right first time, as well as getting the best deal available for them. 

For more information or to discuss your application, please call me on 01494 526 400 or complete my online enquiry form today.

FAQs

A default is registered on a person’s credit file if they default on the payment for a debt. A lender will typically try to resolve the issue before reaching the default stage, but if this isn’t possible, a default will be registered. 

A default will stay on your credit file for 6 years after it was first registered. To limit this time as much as possible, it’s worth checking your credit file to confirm the default has been registered on the correct date, and not several months later or differently with different credit reference agencies. 

Technically there is no such thing as a ‘default mortgage’ but the term can be used to describe mortgage products from lenders who have lending criteria which allows for 1 or more defaults to be registered on the applicant’s credit file.

Yes, there are several lenders who will consider applications from those looking to remortgage with or after one or more defaults. The rules and lending criteria, as discussed in this guide, will not differ too much between those looking to remortgage and those looking for their first mortgage with a default.

If your partner has defaults registered on their credit file, this can lead to mortgage application rejections from high street lenders. However, there are many specialist lenders who will be happy to provide a mortgage where a partner has one or more defaults.

Your chances of acceptance will come down to the details of the defaults, such as when they were registered and the status of them.

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