Get a Mortgage With a Default on Your Credit File

Can a person with a default on their credit history still acquire a mortgage?

You certainly can.

In order to determine if a potential borrower is creditworthy, mortgage lenders look at their credit records. A person’s credit report is a synopsis of their track record of paying back loans and other forms of credit. It’s similar to a CV in that it describes your track record of handling debt repayment.

Having a default on your credit report might be a red flag to potential lenders, and they may decide not to work with you because of this. On the other hand, they may still lend to you on a higher rate.

However, there are several specialised loan companies who are willing to work with borrowers with poor credit. A broker who specialises in helping people with credit problems is the best person to approach if you find yourself in this situation.

What is a default?

To default means to fail to comply with the terms of a credit agreement, such as making payments on time. This usually happens when a borrower has missed several payments in succession.

Mortgages, credit cards, auto financing contracts, mobile phone contracts, unsecured personal loans, and retail store credit cards are all examples of credit arrangements that you could potentially default on.

Whether you pay off the bill or not, the default will remain on your credit report for six years.

What is a satisfied default?

As quickly as possible, you should make good on your defaulted debts to achieve a satisfied default. After six years, a default (whether paid or unpaid) will be removed from your credit report. Satisfied defaults are preferred by mortgage lenders since they demonstrate that borrowers who have previously defaulted on their payments have since rectified the situation.