Previous defaults (High number) Mortgage application next week..

[Deleted User]

Hi, Bit of a random one, I've recently posted regarding a mortgage broker, and have now found someone that im going to work with.

My question is, I have 17 defaults registered, 5 or 6 are due to come off this year and next, but i haven't missed a payment for around 2 years now, so my credit history is becoming 'better'.

Would i be a fool to think im going to be accepted next week based off my previous history? Or is there still some what a chance i'll get accepted with an adverse lender of some sort? thanks.

pjs493

I’m no expert, but I think you’ll be very lucky to be accepted for a mortgage under the circumstances. 

[Deleted User]

pjs493 said:

I’m no expert, but I think you’ll be very lucky to be accepted for a mortgage under the circumstances. 

My last default was in 2021, so was a while back.

Edi81

You want to post on the mortgages board. 

How much were the defaults for? How much deposit do you have?
there are a number of brokers who frequent the mortgages board who will have an idea but only if you supply a bit more info. 

pjs493

[Deleted User] said:

pjs493 said:

I’m no expert, but I think you’ll be very lucky to be accepted for a mortgage under the circumstances. 

My last default was in 2021, so was a while back.

That’s still fairly recent for a lender to take of the risk. Especially as you say you have so many. If you had one default and could explain it eg you moved house and thought your final utilities bills were paid, but there was somehow a mistake and you ended up with a default for circa £100 that you paid once you became aware of the situation, a note on your credit file explaining this might satisfy an underwriter. But in today’s world with the number of defaults you have, I think you’re going to struggle. 

If you have a massive deposit and only want a small mortgage, you might have some luck because you’d present less of a risk, but I think you’ll struggle to find a lender in your situation. 

Can you wait until the defaults fall off your credit report and in the meantime build a good credit history? 

[Deleted User]

pjs493 said:

[Deleted User] said:

pjs493 said:

I’m no expert, but I think you’ll be very lucky to be accepted for a mortgage under the circumstances. 

My last default was in 2021, so was a while back.

That’s still fairly recent for a lender to take of the risk. Especially as you say you have so many. If you had one default and could explain it eg you moved house and thought your final utilities bills were paid, but there was somehow a mistake and you ended up with a default for circa £100 that you paid once you became aware of the situation, a note on your credit file explaining this might satisfy an underwriter. But in today’s world with the number of defaults you have, I think you’re going to struggle. 

If you have a massive deposit and only want a small mortgage, you might have some luck because you’d present less of a risk, but I think you’ll struggle to find a lender in your situation. 

Can you wait until the defaults fall off your credit report and in the meantime build a good credit history? 

To be honest, there is only one explanation for all the defaults, I was out of work and couldn’t afford to pay.

most of them are with the same company, I’m getting credit cards, loans, car finance thrown at me left right and centre currently, so my criteria bracket must be OK currently.

ill be looking at a 15% deposit regardless of the property I purchase anyway to be honest

pjs493

[Deleted User] said:

pjs493 said:

[Deleted User] said:

pjs493 said:

I’m no expert, but I think you’ll be very lucky to be accepted for a mortgage under the circumstances. 

My last default was in 2021, so was a while back.

That’s still fairly recent for a lender to take of the risk. Especially as you say you have so many. If you had one default and could explain it eg you moved house and thought your final utilities bills were paid, but there was somehow a mistake and you ended up with a default for circa £100 that you paid once you became aware of the situation, a note on your credit file explaining this might satisfy an underwriter. But in today’s world with the number of defaults you have, I think you’re going to struggle. 

If you have a massive deposit and only want a small mortgage, you might have some luck because you’d present less of a risk, but I think you’ll struggle to find a lender in your situation. 

Can you wait until the defaults fall off your credit report and in the meantime build a good credit history? 

To be honest, there is only one explanation for all the defaults, I was out of work and couldn’t afford to pay.

most of them are with the same company, I’m getting credit cards, loans, car finance thrown at me left right and centre currently, so my criteria bracket must be OK currently.

ill be looking at a 15% deposit regardless of the property I purchase anyway to be honest

Sometimes credit card lenders like higher risk people because they can make money off them and loans can come with high interest rates. 

Did you approach your credit card company/loan lender/etc when you lost your job and come to an arrangement with them? Or did you just miss payments? That can make a difference to a mortgage lender; the willingness to raise the issue before you miss a payment. 

A mortgage lender will also want to ensure that you’re now in a stable job. Obviously lots of people went through job difficulties during COVID so it’s not an uncommon situation. But demonstrating that you’re in a stable job with little risk of losing your income again will reassure lenders. 

bobster2

[Deleted User] said:

To be honest, there is only one explanation for all the defaults, I was out of work and couldn’t afford to pay.

most of them are with the same company, I’m getting credit cards, loans, car finance thrown at me left right and centre currently, so my criteria bracket must be OK currently.

ill be looking at a 15% deposit regardless of the property I purchase anyway to be honest

Please do not assume anything from the fact you may be receiving lots of unsolicited offers of credit (I assume you're not applying for these).

When you say you'll have 15% deposit. Did you actually paid off the credit defaults before starting to save for this? Or are they still outstanding?

And in another thread you were asking about why mortgage providers want large deposits from people with poor credit. It's simply so that they can minimize the risk of making a loss if the person defaults on payments - and they need to repossess the property and sell it. If there was a dip in the housing market - you could end up in negative equity so if they reposses and sell the house they wouldn't recoup the outstanding mortgage in full. A nice big deposit acts as a cushion for them.

[Deleted User]

bobster2 said:

[Deleted User] said:

To be honest, there is only one explanation for all the defaults, I was out of work and couldn’t afford to pay.

most of them are with the same company, I’m getting credit cards, loans, car finance thrown at me left right and centre currently, so my criteria bracket must be OK currently.

ill be looking at a 15% deposit regardless of the property I purchase anyway to be honest

Please do not assume anything from the fact you may be receiving lots of unsolicited offers of credit (I assume you're not applying for these).

When you say you'll have 15% deposit. Did you actually paid off the credit defaults before starting to save for this? Or are they still outstanding?

And in another thread you were asking about why mortgage providers want large deposits from people with poor credit. It's simply so that they can minimize the risk of making a loss if the person defaults on payments - and they need to repossess the property and sell it. If there was a dip in the housing market - you could end up in negative equity so if they reposses and sell the house they wouldn't recoup the outstanding mortgage in full. A nice big deposit acts as a cushion for them.

Yes settled my debts a long time ago.

started saving properly at the start of last year, yes I get that, but I think 25% is a BIG deposit for anyone, even in a position such as mine.

i mean the average house price is £170k now where I live, so that’s a nigh on £40k deposit.

as I say, friends I have still have defaults registered and owing money to said defaults, and have had 10/15% mortgages.

kingstreet

There are lenders who will offer 85% on no defaults in last 36 months regardless of number/value of previous defaults. Just looked at one and the rates range from 7.19% for five years with £1,495 fee to 8.29% for a two year fix with no fee.

If last default is less than three years old, the next 85% products range from 7.74% for five years with £1,495 fee to 8.49% for a two year fix with no fee.

[Deleted User]

kingstreet said:

There are lenders who will offer 85% on no defaults in last 36 months regardless of number/value of previous defaults. Just looked at one and the rates range from 7.19% for five years with £1,495 fee to 8.29% for a two year fix with no fee.

If last default is less than three years old, the next 85% products range from 7.74% for five years with £1,495 fee to 8.49% for a two year fix with no fee.

Thanks King.