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Hello everyone,


I’m currently looking to buy my first home (around £160,000- £200,000) using either the new 5% deposit mortgage or the equity loan. I currently have £12,000 in a LiSA which can be used in November. 

Unfortunately, I have a default on my account from January 2016 (for £99 but is settled). I also have 3 late payments. One in 2018 and two in 2019. I have a good credit score with all three agencies and earn £40,000 a year. I have zero balances on all credit cards (including using them and paying them off each month) and I do not use my overdraft. 

Basically, I’m wondering whether I’ll be eligible to get a mortgage with an old default and the missed payments on my file. It will have been almost 2 years since any negative mark on my credit file by the time I apply for the mortgage (November). Would I be eligible for a high street mortgage? If so at what rate? If not, would I need to use a specialist lender? Any advice or insight would be massively appreciated. 

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Through the Help to Buy Equity Loan Scheme, you may be eligible for a Mortgage with a few High Street Lenders. Rates would be competitive, around or a bit less than 2%. You would use your 5%, plus 20% from the government (equity loan) to top up your deposit to 25%. Greater deposit, equals less risk to the Lender. So a greater chance of being approved.

Obtaining a Mortgage on a traditional/non-new build property isn't doable for anyone at the moment with a 5% deposit.

As you are looking to buy in November, you have a bit of time to make sure the rest of your finances are all in order, which will help. For general info: https://ukmortgageadvisors.co.uk/blog/can-you-get-a-mortgage-with-a-default/

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