Mortgage with defaults
ANY DEFAULTS REGISTERED OVER 2 YEARS AGO CAN BE IGNORED, DO NOT HAVE TO BE REPAID AND YOU CAN BORROW UP TO 85% OF A PROPERTY'S VALUE
I see more defaults registered on clients credit files than any other adverse credit data. Lenders are obligated to inform you if you have missed payments on an agreement and to give you time to bring the payments up to date. Unfortunately, some are too quick of the mark and before you know it, a default has been registered on your credit file and once on there, it is difficult to have them removed.
If I need a Mortgage, how much can I expect to borrow?
- 95% if the Defaults were registered over 3 years ago and you are buying under the Governments Help to Buy Mortgage Guarantee Scheme.
- 90% if the defaults were registered over 3 years ago
- 85% with unlimited defaults if they were all registered over 2 years ago
- 85% if you have no more than 2 defaults in the last 2 years.
- 75% with unlimited defaults after 1 year
It is very important that you obtain a copy of your credit file to see when the defaults were registered and showing the actual monetary value they were for. Having only 2 defaults in 2 years and looking to borrow 85% as I have mentioned above, would not be possible if one of the defaults was for £2,000 and registered 10 months ago as lenders criteria states the maximum it could be is £1,000 in the first 12 months.
Right to Buy and Shared Ownership purchasers should go to the relevant page as the criteria for defaults, CCJ's and arrears is not the same. Any defaults, CCJ's or arrears are ignored after 1 year.