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Mortgage Advisor & Director
What is a default?
If you have missed a repayment date and have overdue payments on a loan, mortgage or another credit account, this is known as a default.
While it can be more challenging to get a mortgage with a default in your credit history, it is not impossible by any means. Our team of experts work with more than 100 lenders, including those who specialise in bad credit mortgages, to find you the perfect deal.
If you are struggling financially due to COVID-19, you can apply for a mortgage payment holiday until 31 October 2020. Mortgage payment holidays due to COVID-19 have been extended for six months. Note that there are risks in having a mortgage payment holiday that is several months; read more in our guide. The FCA has also ordered lenders not to start or progress repossession activities until after the 31 October.
Can I get a mortgage with a default?
Yes, with the right lender, it is possible to get a mortgage with a default.
High street lenders are more likely to refuse a mortgage application with bad credit. However, there are specialist lenders in this area that are used to dealing with these applications.
We recommend using an experienced broker to ensure that your application is successful and to avoid leaving another black mark on your credit record by being refused for a mortgage.
What happens when you default on your mortgage?
Defaulting on your mortgage is the most severe sort of default. This is known as mortgage arrears and is taken seriously by lenders.
You must contact your lender as soon as possible to discuss how to get your mortgage back on track. They may be able to help you by organising a mortgage payment holiday or repayment plan. If you have Mortgage Payment Protection Insurance, now is the time to use it. You may also qualify for help in paying mortgage interest payments from the government if you are on certain benefits.
What are the risks with defaulting on your mortgage?
The ultimate risk of being in defaulting on your mortgage payments is that your lender may take steps to repossess your home. It is essential to note that this is the final option and only starts once all other avenues for repayment have been exhausted. That shouldn't stop you from contacting your lender as soon as you can to discuss a route forward.
Should I consider insurance?
If you are concerned about being able to afford mortgage repayments should the worst happen, it might be worth considering insurance.
There are specialist insurance products available such as Payment Protection Insurance which will cover you if you can't work due to an accident, illness and occasionally if you have been made redundant. Read more in our guide. Please note that if you are already in mortgage arrears, you will not be able to get insurance to cover missed payments.
Where can I find advice?
If you are in financial difficulty or struggling with debt, seek help. There are a few agencies that can help you to understand your options.
Our team of experienced advisors can help you to explore your options with regards to your mortgage. We have helped many people experiencing financial difficulties in finding the right finance. Get in touch today to see how we can help you.
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Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
Last updated 28 February 2024