Will I get a mortgage with defaults / DMP on my credit file?

edlondon

Hello, I would really appreciate any advice anyone is able to offer.

I had credit problems in the past (in fact I was a 'debt free wannabe' on here years ago!) In April 2016 I entered a DMP and paid off all my debts by December 2020. This did mean that I ended up with defaults on my credit record. As of today, the 'blips' on my credit record are as follows:

• Default July 2018 £1507 credit card- part settled (Bank of Scotland)
• Default July 2018 £1507 credit card- part settled (Link Financial who bought the debt above defaulted me as well)
• Default April 2017 £7279 loan - part settled (Natwest)
• Default October 2016 £2063 overdraft - part settled (Natwest)
• Wonga payday loans from December 2017 (paid and closed at the time)
• The DMP itself. I can only find mention of this once on my Experian credit report, where a closed Halifax account reported me as being in a DMP. I can't tell when they reported this, it just says 'March to August. The account was closed in April 2020. I hope the report of being in a DMP won't stay on there until April 2026 when the account drops off my credit record....

My question is, I would really like to apply for a mortgage in December this year with a view to moving into a flat around next April, when my tenancy on my rented flat is up. Would I have any chance? And if so, where would I be best off applying / would I need a bad credit broker specifically?

I have a 20% deposit through some inheritance I got, and earn enough that I do not think the affordability of a mortgage would be an issue (from research I have done). 

Many thanks!

kingstreet

I had a similar case yesterday. Recent DMP settlement and defaults upwards of four years old.

Tried Halifax, as you do, but no go. Precise accepted at 80% LTV with rates of 4.59/4.79 but you may get slightly lower if the DMP was completed earlier than ours.

K_S

@edlondon Based on the limited info in your post, I wouldn't expect you to need a specialist bad-credit broker for the case at 80% LTV. Though, as highlighted above, you may indeed end up off the high-street.

ACG

I agree with the above, it should be fine. 
Rates wont be market leading but either a specialist lender (along the lines of Precise) or possibly a little building society. 

edlondon

I am very grateful for the helpful responses. There is one other thing I should have asked: Does having adverse credit like mine tend to affect how much lenders will lend you?

In my case, I do have a decent deposit (20%), but I would need a loan amount of 4 - 4.5 x salary in order to buy a property in the area I want (my deposit represents 20% of a property price assuming I could get a 4.5x salary mortgage). From calculations online, I do not think affordability would be an issue due to my current outgoings. Do you think I would stand a chance, or do lenders tend to offer lower maximum mortgage loans in cases like mine?

thanks again.