Many people assume that if they have a poor credit rating due to missing a payment or two on a credit agreement they can find it hard to get a mortgage. Once a payment on a credit agreement is missed it will get registered on your credit file for six years, unlike a CCJ, which if paid within 28 days of the judgement gets removed from your file. This means that any missed payments will affect your credit for six years before it is back to normal and this can mean you are turned down for mortgages. Help is at hand however in the form of a default mortgage.

With the “credit crunch” most if not all high street mortgage lenders now decline mortgages for people with missed payments on credit agreements or defaults. As they have limited funds to lend in 2009 they can and do chose to lend to people only if they have a clean credit history.

I have a default – what is the answer?
A default mortgage is a type of mortgage that accepts people who have had missed payments which are recorded on their credit rating. For some people a missed payment could have been through no fault of their own and it can be unfair that they are treated in the same way as someone who is serial defaulter on credit agreements.

Pros and cons of a default mortgage
As with any mortgage there are pros and cons of getting a default mortgage and here are a few of them

Pros
You can get mortgage when previously you have been turned down. After making your repayments on time your credit rating will slowly be repaired, meaning you can change mortgages at a later date to a high street mortgage lender. You can get onto the property ladder this year once property prices have bottomed out.

Cons
You will have to pay a far higher rate of interest as you are seen as more of a risk as you have previously defaulted on a mortgage. Not all mortgage lenders will offer a default mortgage.

Default mortgage advice
For more information on getting a default mortgage it is important to do your home work and check out the mortgage compariaon websites to understand your option. Alternativley you can speak to an independent mortgage advisor for default mortgage advice. Not all independnet mortgage advisors offer free mortgage advice, so if you are looking to apply for a default mortgage it is importanat to make sure you fiancail advisor offers fee free mortgage advice.

Jason Haines is a protection and mortgage advisor at godirect.co.uk, one of the UK’s most trusted information site about personal finance. Here you will find information on all the major mortgage lenders mortgage rates, and you can save money on your mortgage protection as well.

Article Source: Default Mortgages – Can I Get a Mortgage With a Default?

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Default Mortgages – Can I Get a Mortgage With a Default?