5% mortgage deposit with settled defaults

Villamatt1978

Hi all,

I am planning for a mortgage now and have 3 defaults from 2020-2021 on my credit file. Totalling around £2500. I have been advised by a broker once paid off leave for 12 months before submitting an application. I am looking at May 2024 when the defaults will be 3 years old and settled for 12 months. Are my chances of getting a mortgage with 5% deposit very unlikely? I will struggle to get 10% by then but might just do it.

ACG

I have just had an offer subject to valuation for a client at 95% LTV. The customer had defaults (3 years old), pay day loans last year and some late payments. 

Is it possible? Yes. 

But the next 12 months are a little up in the air. Some people are expecting the end of the world, others are expecting it to be quite a mild recession. It probably would not take a lot for 95% deals to be pulled or for criteria to tighten up. 

All you can do is what you can do - which sounds really corny doesnt it. Concentrate on saving up and see what is around when you are ready. If house prices drop - thats a double edged sword, you might find you have 10% deposit, but you may also find products are being pulled. 

Villamatt1978

ACG said:

I have just had an offer subject to valuation for a client at 95% LTV. The customer had defaults (3 years old), pay day loans last year and some late payments. 

Is it possible? Yes. 

But the next 12 months are a little up in the air. Some people are expecting the end of the world, others are expecting it to be quite a mild recession. It probably would not take a lot for 95% deals to be pulled or for criteria to tighten up. 

All you can do is what you can do - which sounds really corny doesnt it. Concentrate on saving up and see what is around when you are ready. If house prices drop - thats a double edged sword, you might find you have 10% deposit, but you may also find products are being pulled. 

This is really helpful and appreciate the example of your client which gives me some hope.

I shall continue as you say on concentrating on saving up and see what's around when I am ready. 

Thanks for taking the time to reply.