Mortgage with defaults

rintyrad

Hi guys

So ideally I am looking to get a mortgage in the next couple of years. Had some adverse credit in the past

By the time of when I will be looking at getting a mortgage (February 2021) I will have 3 defaults left on my file.

Natwest £3892.00 unpaid default date 01/02/2016
Natwest £52 unpaid default date 31/12/2015
Cabot £0 paid default date 04/01/2016


So the defaults will be 5 years old – what do you think my options for mortgage wise will be?

[Deleted User]

Not so good while they remain unpaid.

It suggests you're not too concerned about settling debts, which isn't a trait mortgage lenders value in their borrowers.

rintyrad

i was working under the assumption that it didnt matter if defaults are paid or not. They're still defaults.

[Deleted User]

They're still defaults. But one route says you fell on hard times and the settled them, while the the other says you'd rather avoid paying even if you're able.

Lenders look more kindly on one of those options than the other.

muhandis

If you don't intend to clear the sums outstanding, and given that you intend to get a mortgage only in Feb 2021, in your place I would wait out an extra year that will take it to Feb 2022, making it six years since the latest default (Natwest Feb 2016) so taking it off your credit file as that's the most significant of the lot.

And of course stay careful to avoid any more blemishes on the credit report during that period and keep building a healthy deposit in the meantime.

rintyrad wrote: »

Hi guys

So ideally I am looking to get a mortgage in the next couple of years. Had some adverse credit in the past

By the time of when I will be looking at getting a mortgage (February 2021) I will have 3 defaults left on my file.

Natwest £3892.00 unpaid default date 01/02/2016
Natwest £52 unpaid default date 31/12/2015
Cabot £0 paid default date 04/01/2016

So the defaults will be 5 years old – what do you think my options for mortgage wise will be?

If you still want to go ahead with a mortgage in 2021, as per a mortgage broker site https://www.onlinemortgageadvisor.co.uk/bad-credit-mortgages/mortgage-with-defaults/#satisfied-default-mortgage -

Can I get a mortgage with a satisfied default?
Most people in the industry assume that repaying bad debts is important when it comes to being approved for new borrowing, but strangely this isn’t the case in the mortgage world. Yes, it will almost certainly improve your ‘credit score’ if you have satisfied your defaults before you apply for a mortgage, but it is not always essential with the more flexible lenders because often they don’t actually run a credit scoring system anyway.

Mortgages with settled defaults are slightly easier to obtain, and with the adverse lenders who credit score, some will grade your application into a certain ‘tier’ of risk. Which tier you fall into will dictate which rate you’re eligible for with some lenders. Generally, the lenders that accept defaults are really only concerned with when they were registered, not the dates of settlement, so mortgages with unsatisfied defaults are just as easy to be approved for so long as the dates of registration match up.