Mortgage with Defaults

Superhoopza

ACG said:

Its not really that cut and dry. 
Some lenders have no limit and work from the registration date - they are criteria driven rather than credit score driven. 
Other lenders have limits, but they may have different limits - ie, if you have had 2 in the last 3 years we will charge you x%, if you have had 3 we will charge y%....
Other lenders (high street lenders), may or may not have limits and just rely on credit scores. If you have 2 defaults for £20 on mobile phone contracts, it is more likely to pass than if you have 5 defaults on credit cards for a grand each. 

The one thing they all have in common though is that if you default today, the line is drawn in the sand. It will only get better. 

Again, im not suggesting you do default or you do or do not enter a DMP. Just trying to be as factual as I can be. 

Another thing to consider is if you do default, that means you are pretty much stuck for a little while - you might struggle to get a phone contract, a new tenancy agreement etc. 

I know you said you aren't here to give debt advice but those last two points, especially around the tenancy agreement, no one else has mentioned and are such good points.

Thanks so much

JustMe18

We have 2 defaults ( gone into default in October 2022, but satisfied both in January and February  2023), amounts were £850 & £4500. I didn;t know what default is, didn't pay my credit for a few months and then paid everything off. At that time I didn't know not paying 3 months would cause a default. Very silly and I wouldn't ever do that. As now we are waiting to hear about mortgage, only could go with kent reliance or even worse lenders due to this, but still giving it a go. I would say defaults are really bad for your ability to get mortgage, but only from my own experience.

summerb64

One other thing I would say to bear in mind is if you default with certain lenders you will probably have trouble getting a mortgage with them even if your defaults with them are repaid in full or in part, they have long memories and it usually comes up after the AIP. So if you have lots of different lenders you may potentially default with it could narrow your choice. Just a heads up 

Superhoopza

JustMe18 said:

We have 2 defaults ( gone into default in October 2022, but satisfied both in January and February  2023), amounts were £850 & £4500. I didn;t know what default is, didn't pay my credit for a few months and then paid everything off. At that time I didn't know not paying 3 months would cause a default. Very silly and I wouldn't ever do that. As now we are waiting to hear about mortgage, only could go with kent reliance or even worse lenders due to this, but still giving it a go. I would say defaults are really bad for your ability to get mortgage, but only from my own experience.

Thank you for sharing

blyth_2

I have defaults all dating back to 2009, none are showing on my credit reports anymore , I pay a minimum amount per month to them. Do you think this will stop me getting a mortgage?

ACG

blyth_2 said:

I have defaults all dating back to 2009, none are showing on my credit reports anymore , I pay a minimum amount per month to them. Do you think this will stop me getting a mortgage?

No, but some lenders have very long memories and may no longer lend to you again. 
Also some lenders may have an issue if they see you are paying debt collection agencies. 

The 2 things combined, you may need a lender who is unlikely to ask for bank statements. 
Its probably not a bad idea to speak to a broker. 

blyth_2

Thank you for your reply ACG, it’s not what I wanted to hear. As now I worry we won’t get a suitable mortgage, if at all, we are buying in our late 50’s.
I'm buying with my new partner and am using the profit from my house which I’ve sold, as a deposit, which equates to half the asking price. We will also be adding cash from my partners savings which is a quarter of his share. 

On the deeds we will be tenants in common.

I didn’t want to be on the mortgage, but our mortgage advisor said I need to be as mortgage lenders would see me as a sitting tenant, and they don’t like that. Plus we need my income to boost my partners income to be able to buy the house we want.
I’ve been mortgage free for 10 years and am finding it all very stressful. 

How often do mortgage lenders not ask for bank statements?
Im clutching at straws here 😳

ACG

At 50% LTV I think you will have a few lenders who do not ask for bank statements - especially if you are both employed and have been for maybe 12 months. 

You will be fine (if you take nothing else from this post, take that). The point I think I am making is that you might not have every lender available, but that does not necessarily mean it will cost you more. Its just one of those things that might need a bit of navigating. 

blyth_2

Thank you for your reply.
I am employed, by the same employer for 31 years.
My partner is self employed and has been for 22 years, and up to date with tax etc
We both have provided evidence of this to the mortgage advisor
I guess all I can do is cross my fingers and toes and pray the mortgage lender doesn’t want bank statements 🤞🙏

blyth_2

Will this mean we will have to have an adverse credit mortgage because of my past history and still paying token payments?
My partner has a good credit history