default - how does this affect mortgage?

thriftymoo

Hi

I've got a default on my credit rating due to having to go on a DMP for my credit card debts last year. I was wondering how this would affect my chances of getting a mortgage in the next few years?>

I have no idea if it would completely stop me from getting a mortgage or just make it much more expensive?

Any advice would be great?

~Beanie~

It won't stop you from getting a mortgage but you may need a specialist lender who does have higher interest rates.

thriftymoo

thanks, my mum has been looking at apartments today and its made me think i really should check this out sooner rather than later!

thriftymoo

any other advice please?

Louise4793

Hi, if you were to try and apply for a mortgage now, and in the current market, you would really struggle. However, if you wait a couple of years like you have said, wait for the market as it is to settle down (if it does?!) save up and get a decent deposit and, if you havent done aleady, pay off your credit card debt then you will be in a better position, however you may again struggle with the high street lenders and other major lender, and like the person above has said you may have to take out a mortgage with a higher rate.

I would suggest you get a decent deposit behind you to help with the monthly payment burden as this will lower the high rates offered to you.

Good luck anyway!

thriftymoo

thank you louise, what you've suggested is my plan at the moment, i think i would be very mad to go anywhere near buying a house at the moment!

UK007BullDog

You would not be getting a mortgage at this time. There are hardly any lenders left willing to take on and you would need a bigger than average deposit with a poor credit record.

Pay off your debts, clean up your credit record and then start saving. Currently FTB need at least 25% deposit.

thriftymoo

UK007BullDog wrote: »

You would not be getting a mortgage at this time. There are hardly any lenders left willing to take on and you would need a bigger than average deposit with a poor credit record.

Pay off your debts, clean up your credit record and then start saving. Currently FTB need at least 25% deposit.

Thanks for your advice, as i mentioned even if i didnt have a default i wouldn't go anywhere near the housing market for at least a year or two anyway and by that time my debt will be gone and i'll be saving. just wanted to make sure that a default would not stop me in the future and your advice has helped me see all is not lost if i stick to my current plan of action!

THSHARIF

you will not get a good rate. 7/8% if your lucky on a repayment mortgage.

if your defualt is within 3 years this will limit how many lenders you can use.

i have had my mortgage refused with a 25% deposit , had an phone bill outstanding on my credit file.

i have had to make another application only on my partners name. to get a decent rate.