What is a bad credit mortgage?
Bad credit mortgages are for people with a less than perfect credit background.
Essentially, they give people who have had financial problems in the past an opportunity to get a mortgage product. This means they will be able start their plans, whether that is to buy a house or release money from their existing property by remortgaging.
Having bad credit increases the risk to lenders, as it shows that you may have had financial problems in the past, and therefore could struggle to make repayments.
To reduce these risks, many lenders may charge higher interest rates. In some cases, often with high street lenders, they may not lend to you at all.
We believe that everyone should be able to get the finance they need, regardless of their past. So, we work closely with a range of specialist lenders to offer purchase and remortgage solutions to people who have been declined by the high street.
What can cause bad credit?
There are a number of different factors which can cause a bad, poor or adverse credit background. It is important to be aware of each type to avoid them in the future.
Bad credit can be a result of:
- Missed or late payments on loans, credit cards and mortgages
- County court judgements (CCJs)
- Accounts in default
- Bankruptcy
- Debt management plans
- IVAs
Whatever the cause, our team are always here to advise and guide you in the right direction, helping you to make an accurate decision based on your personal situation.
How to get a mortgage with bad credit
Getting a mortgage with bad credit or a low credit score can be a bit more complex, so it is important to try and get a few things organised first.
- Assess your credit record – Your first step should be to understand what is actually showing up on your credit record. In doing so, you will have a better idea of which companies will be able to help you.
- Think about your deposit (if you are buying a house) – The higher the deposit, the less of a risk you are. So, it is worth trying to save up as much of a deposit as possible. By doing this, you may improve your chances of getting accepted.
- Reduce the number of credit searches – When you’ve submitted an application to borrow money, a credit search will be performed on you. Although this is standard, if you submit lots of applications with different providers and you are rejected, this can show up on your credit record in the future. This could cause further problems down the line. Therefore, it is important to try and avoid having too many hard credit searches.
Speak to an expert – Talking with one of our qualified mortgage advisors can help you understand what options are available to you and what you need to do next.
If you're having financial problems, it's a good idea to reach out to your current creditors for help. They may be able to offer support or arrange alternative repayment plans. For extra support, you could also contact MoneyHelper or Citizens Advice Bureau (CAB) who offer free advice.
How do I enquire?
Call us for FREE or enquire using the form below.
Don't forget – making an enquiry will not affect your credit rating in any way!
Applying for a mortgage with credit problems
The application process is similar for every customer, whether you have good or bad credit. You can apply either by phone or through our online form above.
- Start by making an enquiry to our team either by calling us or by using our online form above.
- You will need to answer some questions first, so we can understand your circumstances in order to find a product that fits.
- We will search our databases to find you the best possible outcome for your circumstances.
- If we find a suitable product, we will talk this through with you so you can decide if it is the right fit.
Our advisors are here to support you every step of the way. If any concerns or uncertainties arise, they’re on hand to ease these.
Types of bad credit mortgages:
Credit issues can be the result of many different factors. Therefore, there are a variety of solutions available, to make sure the right help is given to each and every customer.
Mortgages with a CCJ
A CCJ or county court judgement is a type of court order, which can be registered against a person who has not met repayments. They can be harmful to your credit profile and can make it difficult to get a product. Luckily, our panel of specialist lenders have solutions which can help, meaning that you may be able to get a mortgage with a CCJ.
Mortgages with a default
A default is where a person’s account is closed down, because they have failed to make repayments. An example of this would be if you keep missing or forgetting to pay your mobile phone contract, your provider may choose to close your account. In this instance your account would be in default. Lenders may be less likely to offer you a loan if you have defaults, as it signals that you could be a risky person to lend to. However, our panel of lenders have products with flexible criteria, so we may be able to get you a mortgage with a default.
Mortgages with late payments
If you have missed or late payments on your credit record, you may be considered to be a higher financial risk. Therefore, many lenders may be reluctant to offer you products. Our lenders take a more relaxed approach when it comes to assessing cases. This means they are often comfortable with lending to you even if you have missed or late payments on your credit profile. So, we may be able to help you get a mortgage after late payments.
Whilst it is still possible to get a mortgage with these credit issues, it is worth noting that the options may be more limited and interest rates may be higher to balance the risks for lenders.
Do high-street lenders offer bad credit mortgages?
The criteria varies between different high street lenders, with some being more relaxed than others are. Therefore, it depends on the provider you go with.
Generally, they have more strict criteria than specialist mortgage providers. This can make it difficult to get approved with a high street lender if you have bad credit.
However, if you have only missed the odd payment on small balance credit items or it has been a long time since you missed any repayments, they may be more willing to accept you.
But, if your adverse credit is recent or if your credit background is very poor, you are unlikely to find a high street provider willing to lend to you.
Despite this, there are many other specialist mortgage brokers, like us, who can help you find a product.
We have a panel of lenders who take a more flexible approach to lending, which means you are more likely to get accepted, even with a poor credit background.
How can a bad credit mortgage broker help?
If you have a bad credit history, your borrowing options become a bit limited. Therefore, there may only be a selected number of lenders who are able to help you.
Finding these lenders can be hard, particularly when you don’t know the market. That’s where a bad credit mortgage broker can help.
With specialist industry knowledge and an in-depth understanding of what products are available to which customers, they are well equipped to find you a good product.
What’s more, they can find all this information in a few quick searches, through their databases. This means that you can find relevant products quickly and efficiently.
Using a broker can be useful, but there are usually extra fees involved than if you went directly to a lender.
If you’re looking for a reliable bad credit mortgage broker to help you, then you’ve come to the right place. We focus on helping customers with credit problems, allowing them to achieve their goals. Whether you're looking to get your first mortgage or are considering remortgaging with bad credit, we may be able to help you.
