Angel Thomas
Principal Adviser, In2Equity Ltd
A default on your credit file does not mean you cannot get a mortgage. It means you need to know which lender to approach, and when. Apply to the wrong lender at the wrong time and you get a rejection and another hard search on your file - making things worse.
Here is the timeline, by lender tier, after a satisfied default.
The 12-month tier (specialist lenders)
A handful of specialist lenders will consider you 12 months after a satisfied default, with a deposit of 15% to 25%. The rates are higher than the high street, but the door is open. These lenders look at the story behind the default, not just the date.
The 3-year tier (mid-tier building societies)
Several building societies will consider you 3 years after a satisfied default, with a 15% deposit. They tend to assess manually and take a view on the circumstances - a one-off life event is treated very differently to a pattern of missed payments.
The 6-year tier (high street)
Most high street lenders want the default to have dropped off your file entirely, which happens 6 years after the default date whether or not it is satisfied. Once it is gone, you are back to mainstream rates and mainstream deposits (5% to 10%).
Unsatisfied defaults
An unsatisfied default - one you have not repaid or agreed a plan for - is much harder. Most lenders will not lend until it is satisfied or under a formal arrangement. If you have an unsatisfied default, the first conversation is about resolving it, not applying for a mortgage.
How we approach it
We pull your credit file from all three agencies, map every adverse entry against each lender's criteria, and tell you exactly when you will be accepted and by whom. No guessing, no scattergun applications, no unnecessary hard searches. If you are 6 months away from a better tier of lender, we will tell you to wait - even though that means no fee for us yet.