Bad credit home mortgage
Trying to get a mortgage for your home when you have bad credit can feel a bit daunting and almost impossible if you have not used an advisor before. We recommend you speak to our mortgage heroes as they could boost your chances of acceptance massively. In an ideal world everyone would have a perfect credit score and lending would be easy, but we know this is unrealistic. Follow our guide below to see how bad credit does not automatically exclude you from securing a mortgage.
What is a home mortgage for bad credit?
This is a mortgage specifically for borrowers with a poor or non-existent credit history. You may have defaulted on payments for lending before, been subject to a CCJ or you have never built up a credit history as you are new to the UK or have not entered into a financial agreement before.
Lenders who offer home mortgages for bad credit are much more flexible and base their decision on the severity of the credit issue and how it was caused, how much time has passed since the incident and if they think these issues will happen again. The rates and payments may be higher than if you had a pristine credit report as you are still deemed as a bigger risk. However, it’s a really busy market with several lenders making the rates much more competitive than you might think!
How do I secure a mortgage when I have bad credit?
First, you need to get hold of your credit reports to underline what the issues are. The credit report should show you a list of all the loans, credit cards, overdrafts and potentially even utility bills you have had. They will also show where these agreements have gone wrong or if they are still left outstanding. Sometimes, providers do not close agreements once they have been settled which could impact your credit too so now is a good time to make sure all financial agreements are recorded correctly. Experian, Equifax and TransUnion are the three most popular agencies used by lenders and what they record can differ. Now is the time to challenge any discrepancies and repair your credit score as much as you can as it can take credit reference agencies 1-6 months to update your report accordingly.
Next, you need to think about your deposit and specifically if there is a possibility of increasing it. The bigger the deposit the less of a risk you are to lenders which will contribute immensely to the type of deal you get.
Also, keep in mind that multiple credit searches on your file can be a detriment too. A mainstream bank will most likely reject your mortgage application as they do not cater for bad credit mortgages. A decline for lending on your credit file could decrease your chances of getting accepted even if you use a broker afterwards.
Next, you need to find a broker who specialises in bad credit home mortgages. This will give you the best chances as they will have access to the whole market of lenders.
Here is a checklist on what to keep an eye out for:
Our superheroes tick all these boxes and are expertly trained to help you secure a mortgage even if you have a poor credit history.
In less than 2 minutes, we’ll fly out & return with a mortgage broker perfect for you!
Bad credit mortgage lenders are much more flexible than high street lenders and therefore can support applicants with credit issues such as:
The providers will look at your application and credit history altogether and evaluate their outcomes on multiple factors such as the severity of the credit issue and how it was caused, how much time has passed since the incident and if they think these issues will happen again. A customer with a long line of credit issues compared to someone with one CCJ may be less favourable as it tells the lender you are more likely to default on your mortgage payments.
Repossessions and bankruptcies are viewed as the most adverse whereas a missed phone payment may be a much smaller issue in the grand scheme of things. Therefore, it is important to disclose as much information as you can to your broker so they can align you with the best lender.
We love assisting clients, especially those who have had difficulty finding the best deals elsewhere.
I applied for a mortgage from another organization after seeing an excellent offer online, but my application was declined due to my credit history. I am grateful to MoneyNest for connecting me with their broker, who discovered out what the problem was and now I am a client of theirs 🙂
I had a bad credit history and didn’t know how to apply for a mortgage. The superhero advisors from MoneyNest came into my life when they matched me with an agent who found the perfect lender willing to take on such risk, giving us both hope that there are still opportunities out here!
Rates will vary on a case-by-case basis. Lenders will consider your credit history but also the size of your deposit, levels of income and affordability too. You can find more information on our page ‘bad credit mortgage lenders.
Below is a list of rates accurate as of November 2021 based on a mortgage for £150,000 over 30 years.
As you can see the rates can fluctuate massively in each scenario. The mortgage you would qualify for will be subject to numerous criteria. So, it is best to let one of our superheroes advise you on the right one.
The rates above are for demonstrative purposes only.
The best way to apply is through a broker who specialises in bad credit home mortgages and has access to the whole of the market. You need someone who knows their stuff, so let us help you get started. Contact us so our team of experts can help you find what you are looking for.
If your credit issues are holding you back, our credit expert hero’s are here to set you free!
