Looking for a Bad Credit Mortgage? Get Free Impartial Help Today

Looking for a bad credit mortgage but don’t know where to start?

Do you:

• Need a mortgage but you have bad credit?
• Have CCJs and wondering what your mortgage options are?
• Need advice on getting a mortgage after defaulting on payments?

Find out how to get a mortgage with bad credit

If you have financial issues of any sort or are in need of a mortgage and worried about being turned down by lenders, come to the Mortgage Broker. We understand how stressful dealing with bad finances is, and we don’t think it should mean that you don’t get to move into a home.

Often, a difficult financial situation is caused through no fault of your own. We don’t think you should be punished for something that is often completely outside of your control. Many lenders will turn away those with bad credit, defaulted payments on their record or with CCJs, as they are seen as a high risk. From the lender’s point of view, all they want to know is if they will get their money back.

Unfortunately, what this attitude tends to disregard is that there is a human being at the other end of the transaction. And maybe, just because you’ve missed some payments or had some misfortune in your life, doesn’t mean you aren’t committed to getting a home of your own and paying the monthly instalments regularly.

We specialise in getting people with bad credit into a mortgage. We take great care to search through bad credit mortgage lenders that specialise in bad credit mortgages, getting you the best deal possible.

Can you get a mortgage with bad credit?

In short: Yes. However, there are some caveats. Your financial activity over the last two or three years and especially the last twelve months is vitally important. These records will be examined with a fine-toothed comb and if you show that your spending habits have improved, even over the last year, then historic bad debt is easier to disregard.

If, within the last twelve months, you have missed payments then it is generally harder for you to get a mortgage, but it is by no means impossible. How much this affects your ability to get a mortgage depends on the severity of the problem, the consistency of bad spending habits or how large your loans are.

The best thing to do is get in touch with us as soon as possible so we can start to get to work. We’ll listen to your individual needs, offer honest no-nonsense advice and do our best to get you a mortgage deal. We want to help you; we want to listen; and we’ll need your trust and candour to do so.

We support you every step of the way, and won’t rest until we’ve found the very best rates and mortgage deals for your specific personal needs and unique financial situation.

Improve your chances of getting an adverse credit mortgage

How do I check my credit file?

We recommend using “check-my-file.com” to get the most comprehensive credit information. This site pulls all of its data from the major credit sourcing agencies, Equifax, Experian and TransUnion.

A credit file is a snapshot of your financial conduct and it differs from a credit report by being much more detailed. It takes into account your income, employment history and personal assets. A credit report does not include this information.

A credit file is typically what lenders look at when they are determining whether to accept your mortgage application. Armed with this information, we work with you to discover the ways we can help improve your credit score and improve your chances of being accepted for a mortgage.

What’s great about using “check-my-file” is that by collating the data from three separate agencies, the chance of error or misinformation is eliminated. An error that creeps into one will not be present in the others, so it is easy to see if lenders are picking up erroneous information.

Once you have obtained your credit file, bring it with you when you begin discussions with one of our advisors. It’s a fantastic document to have; it helps us and you find out your financial standing in exacting detail.

How does your credit report impact your mortgage application?

Now you have your credit report, you can see exactly what it is that’s holding you back. Together with one of our mortgage advisors, we can work the problem, offering you all the support you need along the way.

So what counts toward decreasing your credit score?

 

How do I improve my credit score?

We’ve covered what negatively affects your credit score, but what about ways to improve it?

Here are some simple ways to start to turn around your credit score.

• Make sure you’re on the electoral roll at your current address.
• Don’t take out payday loans.
• Pay off the full balance of small credit card purchases regularly.
• Ensure anyone associated with you; wife, husband, etc, has a good financial status.

Some of this is easier said than done, and you’ll have a much easier time building a good score rather than correcting one. That being said, it’s all doable. All you have to do is show that you can pay off bills regularly, even if you have racked up a large amount; if you’re committed to making changes in your financial habits, it will be reflected positively in your credit report.

For a rough estimate of what you may be able to borrow for a mortgage, use one of our mortgage calculators. With only a few details input by you, you can get a better idea of the likely amount you can get.

The situation is far from hopeless. Even if your credit score is under 500, you have a CCJ or other types of bad debts, there are options. We have access to specialist lenders that take into consideration your previous adverse financial problems to weigh up just what risk there really is to them when accepting you for a mortgage.

We don’t think you don’t deserve to have a home just because of unfavourable actions in your past. Actions that may have been unavoidable. Get in touch to move past your debts and into the home of your dreams.

Can I get a bad credit mortgage with defaulted loans?

To default on a loan basically means that you have been unable to make the repayments on a debt.

This can happen on both secured and unsecured loans. An example of an unsecured loan would be a credit card, and for a secured loan think mortgage or student loan.

A default opens you up to eventual legal action, such as a CCJ, so you become a more risky proposition for a potential lender.

How defaulting on your debts will affect your ability to get a mortgage depends on the size and severity of the default. Any amount over £250 and a lender will ask for more details about the default to discover to what extent you are vulnerable financially.

If you have a few defaults registered to you in the last twelve months, this will unfortunately affect your ability to get a mortgage quite severely. Defaults that are over two to four years old are a little more easy to swallow for a lender, and so your chance of getting a mortgage increases.

A way to offset this risk is if you have a large deposit, this communicates to the lender that you are less of a risk. Defaults are not as severe as CCJs but will still raise some warning flags with a lot of lenders who will ask for further reassurances that you will be able to repay your mortgage, such as stipulations on the size of the deposit.

The specialist lenders we have access to will take any defaults into account, and offer us special rates to help get you into a mortgage. A default is a serious but not insurmountable obstacle by any means when it comes to getting a mortgage.

 

 

Getting a bad credit mortgage with a CCJ

It’s fair to say that a CCJ is serious business; this is when a creditor has had to take you to court to force you to pay back the money you owe.

If you’ve had to deal with a CCJ and you need a mortgage, you will certainly face a few more hurdles, sorry but that’s just the way it is. Several factors will come to bear when looking at your mortgage options. Getting a mortgage with a CCJ depends on:

• The severity of the CCJ
• The amount outstanding on the CCJ
• When the CCJ was registered

If you have dealt with a CCJ in the past, when it was paid back and how long ago will also be taken into account.

When you get a CCJ, you have to appear before a judge. If the judge believes the CCJ is warranted you will have to come to an arrangement with the creditor to pay back the loan in instalments or all at once.

CCJs are registered to your credit file for six years, whether you pay it off or not.

There is some good news with a CCJ. If you are able to pay it off within a month of it being registered you can apply to have it removed from your credit file. Obviously, if you are able to do this, you should. If your CCJ is settled after this amount of time then it will stay on your credit file for six years. After six years it is removed from your file automatically.

That is to say that you still need to pay it off, it won’t just disappear after six years. If you do not pay it back, you will be open to further action by the court, so ignoring a CCJ isn’t really an option and definitely not something we recommend!

Much like with defaulted loans, a CCJ affects the lenders you have access to, the interest rates offered and the amount of deposit you’ll be expected to put down. Give us a call to talk things through; your options will depend on the factors mentioned above and it’s easier to give you a more definite answer if we know your specific details.

Debt Consolidation Mortgages

You can borrow money against your property to consolidate your debts. This makes many loan repayments manageable by consolidating them into one single loan to repay any unsecured loans you may have.

This helps you to budget more effectively; giving you the ability to pay back what you owe over a longer period of time. However, it should be noted that this usually lowers the equity in your property and puts your home at risk if you were to miss repayments.

Consolidating debt may reduce your outgoings in the short term but means you will be paying more interest over time. It’s a delicate balancing act and one you need to think about carefully. Working with one of our mortgage advisors, we can talk you through your options and ensure that you make an informed decision.

Borrowing against your mortgage requires a lot of thought before you decide to do it, but it can help get those debts paid off and improve your credit score.

Getting a bad credit mortgage with a Debt Management Plan (DMP)

It is a challenge to get a mortgage if you are on a DMP but far from impossible. We enjoy a challenge and specialise in helping people in financial difficulty.

Having a DMP is a great way to get yourself out of the mire of financial trouble. It’s an informal agreement you’ll have with your creditors to pay back your loans at a reduced rate but for a longer period of time. This increases the time you’ll be paying back the money but makes it much more manageable.

When a lender looks at your credit history, they also look at how well you have been managing your debt. Having a DMP shows the lender that you have been in some sort of financial distress but are actively trying to do something about it.

If you are going to look at getting a bad credit mortgage while on a DMP, then you may need to provide additional documentation to the lender to explain the reasons for needing a DMP. This also shows the lender that you have been making the repayments on time, which helps to show that you are less of a risk.

Getting a bad credit mortgage with an Individual Voluntary Arrangement (IVA)

If you have an IVA, you’ll be paying off the debt on unsecured loans with your creditors over a set period of time. During the time you are in an IVA, your mortgage options will be more limited because you will be seen as a higher risk to lenders.

The best thing to do is look to get a bad credit mortgage after you have finished your IVA. Even after this period has ended, most lenders will require you to have a 30% deposit, though this does change from lender to lender.

An IVA remains on your credit file for six years and it’s important to select a specialist broker, like us, to deal with your mortgage needs. We have access to specialist lenders that assess the risk of your personal financial situation, and the ways you have dealt with your debt and give you a choice of rates based on these circumstances.

Can I remortgage with bad credit?

Yes. As with pretty much everything else discussed around needing a bad credit mortgage, we need to speak to you to assess your individual circumstances. Finding the best remortgage deal is dependent on what your financial situation is, but you should know it is possible to switch to a new lender or enter into a new deal with your current lender, even with bad credit.

There is also the option of a second-charge mortgage. This is when you keep your existing mortgage and take out a second secured loan against the value of your property. This option is a helpful alternative for those with bad credit so speak to your mortgage broker about this and we can run through the pros and cons to see if it is the right solution for you.

Bad credit mortgages for first-time buyers

Many first-time buyers don’t have a great credit score due to never having a credit card. Mortgages for first-time buyers also tend to have better interest rates to help you get on the property ladder and manage the monthly repayments easier.

As mentioned above, there are a few simple things you can do to improve your credit score, such as using a credit card to purchase smaller products and services and pay them off every month.

If you need a bad credit mortgage and are a first-time buyer, there are still many options. Mortgages for bad credit first-time buyers are obtainable through our specialist lenders. Whether you have a poor credit score, loan defaults or even CCJs, don’t hesitate to get in touch and we’ll work tirelessly to get you the perfect mortgage deal you didn’t even know existed.