There are many mortgage lenders for bad credit ranging from high street banks to specialist mortgage companies. The lender that accepts your application will depend on the severity of your bad credit, the length of time that has passed since it was registered and the cause behind your adverse history.
For an accurate indication of the mortgages, you could be accepted for, ask our experts for their tailored advice. They will be able to provide you with information on what rates to expect and which lenders will accept the different types of bad credit depending on their severity.
There are two questions when assessing eligibility when you are subject to a bad credit history.
Make an enquiry for a free, no-obligation chat and we’ll match you with a broker experienced in helping other customers in similar circumstances
For a lot of borrowers with credit issues, it’s unlikely for a mainstream lender to offer a mortgage. That said, there are plenty of great specialist lenders (you may / may not have heard of!) that cater specifically for people with credit issues, and at competitive rates!
Follow the table below to see how long it could take for a lender to offer you a mortgage depends on the type of adverse history you have.
| 0-12 months | 1-2 years | 2-3 years | 3-4 years | 4+ years | |
|---|---|---|---|---|---|
| Late payments | Yes (any amount) | Yes (any amount) | Yes (any amount) | Yes (any amount) | Yes (any amount) |
| Mortgage arrears | Yes (usually max 3) | Yes (any amount) | Yes (any amount) | Yes (any amount) | Yes (any amount) |
| CCJs | Yes (with good LTV) | Maybe (with good LTV) | Yes (any amount) | Yes (any amount) | Yes (any amount) |
| Defaults | Yes (with good LTV) | Maybe (with good LTV) | Yes (any amount) | Yes (any amount) | Yes (any amount) |
| Debt management | Possible | Yes (if credit report is not affected) | Yes (if credit report is not affected) | Yes (if credit report is not affected) | Yes (if credit report is not affected) |
| IVA | Unlikely | Possible with 25% deposit | Possible with 20% deposit | Possible with 15% deposit | Possible with 10% deposit |
| Bankruptcy | Unlikely | Possible with 25% deposit | Possible with 15% deposit | Possible with 5% deposit | Possible with 5% deposit |
| Repossessions | Unlikely | Possible with 25% deposit | Possible with 15% deposit | Yes | Yes |
The tables above are for indication purposes only. Mortgages can be very technical and will be subject to you and your situation so it is best to seek advice from our experts who can provide you with a much more personal quote.
Some lenders will require more deposits if you have an adverse credit history. In the UK the minimum deposit required for a residential property can be as little as 5% and 15% if it is a buy-to-let. But for borrowers with bad credit, you may have to put down more conditional to what the credit issue is, its severity and the amount of time that has passed since it was registered.
5-10% deposit
If you use a specialist whole of market broker you may have access to mortgages with a loan to value (LTV) of 90-95% if your bad credit issues are considered minor, such as missed phone bill payments, providing you meet the lender’s other eligibility criteria.
But it is likely you will struggle to find a mortgage with such a high LTV if you have a more severe credit history which includes bankruptcies and repossessions, particularly if they are less than 3 years old.
50% deposit
A deposit that large will certainly help you find a mortgage with bad credit – putting down a substantial lump sum offsets some risk to the lender which is often enough for many to consider a wide range of credit issues. Again, it depends on what the issue is and when it was. You will of course still be subject to affordability checks and the lender’s other criteria.
100% mortgage or no deposit
Mortgages with no deposit at all are very rare for the average borrower and it’s very unlikely customers with bad credit would be approved. To secure a mortgage without a deposit you may need to ask a family member or friend to support you with a guarantor mortgage. This is where the lender will secure the mortgage against their property or savings so they can act as additional security for the 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!
Aside from credit history, there are many variables that affect a lender’s decision to lend, separate from your credit history such as:
Usually, the more you earn the more you will be able to borrow, but the way you earn your money is a factor also. If you are self-employed or rely on bonuses, commission or overtime you may need a specialist lender too.
A lot of lenders will not lend to you past your retirement age or will limit the mortgage term to finish when you turn 75. This is because most lenders assume you will not be able to afford the payments once you retire or deem you as a risk as the chances of death are higher.
Dependent children and monthly outgoings such as other loans could impact the level of borrowing permitted.
Non-standard construction might need a specialist lender (a thatched roof, timber frame etc)
No impact on credit scores
