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Ways to qualify for a home loan with bad credit

We understand that applying for a mortgage with bad credit can feel daunting, but there are options out there for you, you just need the right guidance. A lot will depend on how severe your history is, how much time has passed since it happened and how large the debts are/were. There are lenders who specialise in home loans for people with a bad credit history which means a lot more options than you think. To qualify for a home loan with bad credit you can take a few steps to get yourself into the best shape for your application. 

How do I boost my chances of approval?

  • Check your credit reports We recommend you download your credit report from all three credit reference agencies TransUnion, Equifax and Experian. This way you can sift through them to see what bad credit you have as well as removing inaccuracies and outdated financial links. 
  • Organise your paperwork – Mortgage brokers and lenders will need paperwork to submit and evaluate your application. Some of the documents you can expect to provide are ID, income proof, address verification and proof of deposit. Your broker will tell you exactly what you need to provide.
  • Use a bad credit specialist broker – Using a bad credit mortgage broker like one of our experts here at MoneyNest will significantly help you secure a mortgage. They have plenty of knowledge and experience in helping people with all sorts of bad credit. They will know how to put forward your application in the best light and which specialist lender to match you with.

Bad credit deposit requirements 

To qualify for a home loan with bad credit you may need to focus on your deposit as some lenders may expect a larger one to support your application. For a residential mortgage in the UK, the minimum deposit is at least 5% but for those with an adverse credit history, this is likely to rise based on how severe your bad credit is and how old the issues are. This is because lenders will view bad credit as high risk and therefore they will ask for more funds from you to offset some of that risk.

For example, if your credit problem relates to a missed phone payment, a specialist broker may be able to find you a mortgage with a 5-10% deposit. But if you have a history of repossession or bankruptcy you may need a deposit of 25-30%.

Will lenders accept all credit issues?

To qualify for a home loan with bad credit there generally is no one size fits all approach. Some lenders will specialise in offering flexibility to a CCJ and others to bankruptcies. There are lenders out there who will look at applications with multiple credit issues you will just have to meet their other criteria. 

The tables below will show how different lenders will treat your bad credit differently based on the type of credit and how much time has passed since it was registered.

Less severe 

Mortgage providerNo credit history Low credit scoreA history of late payments?
Accord mortgagesCase by case basisPossibleYes
BarclaysCase by case basisCase by case basisYes
HalifaxCase by case basis Case by case basisYes
NatWestCase by case basisCase by case basisYes
SantanderCase by case basisCase by case basis No
Virgin MoneyNoPossibleYes


Mortgage providerMissed mortgage paymentsDefaultsCCJsDMPsIVAs
Accord mortgagesMax one in last 2 yearsUp to max £500If settled after 3 yearsYes ,if settledYes after 6 years
BarclaysMax 3 in last 2 yearsUp to max £200 and settledMax £200 if after 3 yearsYes, if settledYes after 6 years
HalifaxYesYesYesYes, if settledYes after 6 years
HSBCNoYes after 3 yearsYes after 3 years if settledYes, if settledYes after 3 years
NatWestYes, if it did not happen in last yearYes, if settledYes, if settledYes, if settledYes after 6 years
SantanderYes after 1 yearYes after 1 yearYes, if not within 3 monthsYes, if settledNo
Virgin MoneyMax 2 but ignored after 6 monthsMax value £2000 if paidYes, if max value is £500Yes, if settledNo

Very severe

Mortgage ProviderBankruptcyRepossessionMultiple credit problems 
Accord mortgagesYes, if discharged after 6 yearsYes after 6 yearsYes
BarclaysYes, if discharged after 6 yearsNoYes
HalifaxYes, if discharged after 6 yearsYes
NatWestYes, if discharged after 6 yearsBased on the time frame and severity 
Virgin MoneyNoNoYes

Get in touch

The tables above are for indication only purposes and the only way to know how to qualify for a home loan with bad credit would be by getting in touch so our mortgage superheroes can properly assess your situation.

You may not meet the criteria above but that does not mean it is the end of your mortgage journey as everyone’s financial circumstances are different. Our bad credit mortgage brokers have all the skills and experience needed to search the whole of the market for a lender for you. 

Our bad credit mortgage broker matching service will help you on your way to getting on the property ladder. Make an enquiry with us today and they will be in touch.


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