would having 4 year old defaults make a mortgage impossible?

eckosix

I have 2 defaults over 4 years since they were paid off but obviously they are still on my credit file.
Would this mean that I would not be considered by any high street lender with decent rates?
I have a clean file apart from these two and have never been late with or missed any form of payment since.
Any advice appreciated!

GMS

Many lenders would decline instantly, others would rely on credit scoring.

There are 'near prime' lenders who operate for people with historical adverse. A broker should be your first port of call. Do not apply at random to lenders as declines xould harm your credit score.

kingstreet

I'd say you're likely to struggle if you want a 90% mortgage. Your chances would be a lot better at 75%. It would also depend on the size of the defaults. A couple of tiddlers satisfied four years ago might not phase a lender like Halifax on 75%, subject to the rest of your application scoring well enough.

However, two defaults totalling £20k on a 90% LTV might not go your way.

eckosix

The defaults totalled 6k, I do have a 20% deposit, perhaps i need a bit more, but am worried what rates I will be offered. Will anyone who is considering offering me a mortgage give me an indication of the rate they will offer before I pay fees etc?

eckosix

I have just heard back from a whole of market broker I contacted this morning. He tells me he can get 5.75% fixed for 2 years, it is the only 1 he told me about so not sure if its the best or its the only 1 that he can get. Does this seem ok considering my history. Was hoping for a lesser rate!

kingstreet

You apply for a mortgage on a particular product. The application is analysed and a decision is made whether to lend to you or not. The lender won't come back with a "yes, but at xx%" decision like lenders do with unsecured loans.

I agree with GMS. Broker would be your best answer, otherwise you run the risk of multiple credit searches all over your credit file.

The bigger the deposit, the better.

Thrugelmir

eckosix wrote: »

Does this seem ok considering my history. Was hoping for a lesser rate!

Then continue to build your deposit.

eckosix

I dont understand the whole mortgage/ credit score thing. I will phone another broker see if they can come back with anything different.
Thanks for your replies, they are appreciated!

eckosix

Thrugelmir wrote: »

Then continue to build your deposit.

Its just that house prices are reasonable atm and if I continue to save then my deposit might be worth even less % if house prices go up.

GMS

eckosix wrote: »

I dont understand the whole mortgage/ credit score thing. I will phone another broker see if they can come back with anything different.
Thanks for your replies, they are appreciated!

Lenders will assign a score to your application based on a number of factors. These include salary, length of employment, time at address, voter's roll registration and financial history.

As you have 4 defaulted accounts your score will have taken a whack. However they were 4 years ago and have been settled so the score should increase. If you have more accounts running satisfactorily then these should boost your score.

Plenty of lenders are out of the equation. It is important you apply to the correct lender who may not necessarily be the cheapest. After 6 years your defaults will have dropped off your credit file so your score should increase at which point you may be able to get a better deal.

eckosix

GMS wrote: »

As you have 4 defaulted accounts your score will have taken a whack. However they were 4 years ago and have been settled so the score should increase. If you have more accounts running satisfactorily then these should boost your score.
l.

I do only have 2 defaults, I dont know if this makes any difference? (sorry the title is badly worded!)
Thanks so much for your advice, It is helpful to know how the scoring thing works!