Bad Credit Mortgages

Your credit score allows lenders to predict potential future behaviour which is based on your financial activity and therefore shows how likely you will be accepted to apply for credit. A bad credit score can be determined by a number of factors, including late payments, minimum payments, applying to credit too often, falling to victim theft, repossession, or bankruptcy.

Bankruptcy can prove to be the most difficult when trying to obtain mortgages from lenders, and you’re not able to apply until you have discharged. On average, this can take around twelve months, where most firms will require a three or four year period following the discharge and a good credit score before they are able to reconsider a loan.

A bad credit score can often mean that you will be charged higher interest rates and it’s more difficult to be approved.

While your credit score is assessed by each lender that you apply with, it’s noteable to remember that different lenders are often flexible in their criteria for lending money, meaning your credit score may not be as big an issue with some lenders as it is with others.

You can get a mortgage with bad credit

The good news is that despite the disadvantages of having a bad credit score, it does not mean that you can’t apply for a mortgage to buy your dream home, whether you are a first-time buyer or simply remortgaging. However, it is firstly important to consider if you can afford monthly repayments in order to avoid losing your home in the future.

It may seem like a difficult plan at first, but there are many lenders who specialise in offering mortgages that are designed for people with bad credit – these are known as bad credit mortgages. In this case, finding a mortgage broker is the best option to help arrange a mortgage between you, the borrower, and a mortgage lender.

We can help you assess your creditworthiness by checking your credit history with reputable credit reference agencies.

As the main reference agencies rate your credit score differently, and because mortgage brokers are aware of which agencies the lenders are using, it is possible that you will be matched with a lender that you’ve scored highest with. This means that if one agency has listed you with credit issues, finding a favourable mortgage deal is not unfeasible and is certainly not impossible.

Finding a mortgage broker can be particularly useful if you are not confident within the finance and mortgage markets, or do not have time to search for deals, complete paperwork, or contact lenders.

At CS Mortgage Solutions, we have extensive experience, market knowledge and will work with you to determine which type of mortgage you will need.

We also have access to a variety of lenders and unlike banks, have access to more products and might be able to offer you a better chance of finding a deal that matches your credit criteria.

A good start to saving money and making the process of finding a bad credit mortgage quicker and easier is for you to have an expert in the field.

How Do Bad Credit Mortgages Work?

Bad credit mortgages work just like regular mortgages, however, you may be asked to come up with a larger deposit of 20-25% of the value of the home, rather than 5-10%.

When you apply for a bad credit mortgage, the decision will be based upon the duration and the condition of your credit history, your income, and your monthly outgoings and savings to ensure that you can afford monthly repayments in the event that interest rates increase or your income decreases.

A mortgage broker may also wish to know your age due to possible restrictions from lenders, as well as the property type that you are interested in, for reasons of unconventional construction elements such as timber frames or thatched roofs.

There are a variety of credit issues that are commonly accepted by lenders. While bankruptcies and repossessions are among the most severe examples of adverse credit that you can have on your file, specialists often take a more open-minded approach and can offer mortgages to those with a bad credit history. This of course also includes less severe types of adverse credit, including late payments, IVAs, CCJs, IVAs, no credit history, and low credit scores.

Improve your credit score

Even though it is entirely possible to get a bad credit mortgage, there is no harm in making plans to improve your credit score. This way, you can improve your chances to be offered more mortgage deals. After checking your credit history on the three main credit reference agencies, there are several ways to take action to boost your score. This can include looking through all of your credit accounts and searches from the last six months, checking and updating your personal details, including outdated addresses and the electoral roll, rectifying any late payments, as well as removing any unused bank/credit accounts or outdated financial associations that you may have with others.

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