Echo Finance

Mortgage with defaults

Getting a mortgage with defaults on your credit file can be a challenge. Many lenders won’t consider your mortgage application if you have a history of missed repayments. However, there are other lenders that will be willing to look at your financial situation in more detail before making a decision.

Getting a mortgage with defaults

Defaults on your credit file are one of the most common reasons why many lenders decline mortgage applications. But there are plenty of bad credit lenders that will still consider your application. These lenders have helped people get mortgages even if they have CCJs or been made bankrupt.

If you are in this position, using a broker with a good knowledge of the bad credit mortgage market will help you get the best mortgage deal.

 

What is a default notice?

A default notice is a formal letter sent by your creditor after a number of missed repayments and will typically include:

  • The terms you have broken in your agreement
  • How much you need to pay
  • The date you will need to make this payment by
  • The consequences that will occur if you fail to comply
  • The length of time you have to respond to the notice (typically within 14 days)

A default can remain on your credit file for up to 6 years and will be visible to anyone you make a credit application with during this time.

When can you apply for a mortgage?

Satisfying a default (paying it off) can help to increase your chances of mortgage approval. Although you’ve missed repayments, lenders will be able to see that you’ve done all you can to rectify the situation. Paying this debt, however, won’t remove the default from your credit file and it will remain for 6 years from the date of the default.

Bad Credit lenders are most interested in your recent credit activity, so applying for a mortgage soon after satisfying a default is not a good idea. The older the default, the smaller the impact will be on your mortgage application.

 

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
Echo Finance

Registered in England and Wales No. 6939070. Registered office - The 1812 Building, Wheatley Park, Mirfield, West Yorkshire, WF14 8HE. Echo Finance Limited is authorised and regulated by the Financial Conduct Authority. Echo Finance Limited is entered on the FCA register (www.fca.org.uk) under reference 570073. The Guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. The Financial Conduct Authority does not regulate Will Writing, Estate Planning and some forms of Mortgages. © Copyright Echo Finance Limited. Where you have a complaint or dispute with us and we are unable to resolve this to your satisfaction then we are obliged to offer you the Financial Ombudsman Service to help resolve this. Please see the following link for further details: www.financial-ombudsman.org.uk.

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