Moving home, defaults

How to get a mortgage when you have got defaults

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Home Mover with Defaults

Very few people have an immaculate credit history. But evidence of defaults and closed accounts on your file can limit your choices when it comes to finding a suitable mortgage for your next property.

Though it may seem like securing a mortgage with defaults is an uphill battle, it doesn’t have to be this way. There are plenty of lenders out there who are prepared to take a view on your financial situation and offer you reasonable rates and terms. You just need to find the right company and submit a winning application – and you can do both of these things with our help!

Things to consider when moving between properties

A home mover is someone who already has a mortgaged or owned home and is moving into a new property. As a home mover, you can choose to ‘port’ your mortgage with your existing lender or apply for a mortgage with a different provider. Your mortgage broker will be able to advise you on the best option, based on your repayment history and the terms of your current agreement.

As a home mover, you are likely to have some general knowledge when it comes to finding the right mortgage and dealing with brokers. Whilst costs are important to you, you’re focusing on other factors for your move, such as achieving new lifestyle goals; upsizing to meet the demands of your growing family; or changing location due to work or family commitments.

You’re in a much stronger position than a first time buyer, because you have evidence of your ability to pay your mortgage repayments in full and on time, every month. This will put you in a favourable position when it comes to getting a good interest rate. You’re also likely to have built up some equity in your existing property, meaning you’ll be entering into a new agreement with a better loan-to-value (LTV) than before.

One of the most common problems that home movers experience is being stuck in a chain. This is the term used for a sequence of linked home purchases who are reliant on each other for the preceding and succeeding purchases; for example, those buying your house are reliant on you completing on your new home in order to move into your old one.

It’s important to stay in contact with your solicitor throughout the moving process to ensure everyone is kept up to date with potential move dates and any delays are communicated up and down the chain.

How will defaults affect your chances of getting a mortgage?

Defaults occur when you miss multiple payments. Your credit provider will issue a warning to say that you have broken the credit agreement, and, if you do not settle the repayments in good time, they will proceed to close your account.

As you can imagine, defaults can severely affect your credit score – and this can seriously impact your chances of getting a mortgage. In fact, it’s one of the most common reasons why mortgage applications are refused.

If you have a default on your credit file, the lender won’t be able to read an explanation as to why the payments were missed. The default merely serves as a warning for them and any other provider who is considering giving you credit.

It’s tricky enough to secure a mortgage for a new property when you’ve got defaults – but many people make things worse by sending multiple applications to High Street lenders who are unlikely to accept them. Each application leads to a credit check, and having many hard credit checks on your credit report can bring down your overall score, which will hinder your chances of getting a mortgage even further.

Before you approach any lender, be sure to speak with one of our specialist mortgage brokers. We have great connections with lenders who often consider applications with defaults and take a broader view on our customers’ financial situations.

Why use a mortgage broker?

If you’re keen to move home, but you’re worried that your poor credit rating will affect your mortgage application, we can’t stress enough how important it is to bring an experienced mortgage broker on board from day one. And we’ve made it extremely easy for you to access expert advice from a team that has helped thousands of customers with defaults to date.

Simply arrange a chat with our straight-talking team to discuss your requirements and options in more detail. From there, we’ll provide you with free, no-obligation quotes from lenders who are more likely to accept your case. We’re available at evenings and weekends, and you can talk to us online, over the phone or in person – whichever works best for you.

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Gemma May

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