You’ll be happy to know that even if you’ve recently been bankrupt, have an IVA, a CCJ or have missed credit payments, there could still be an opportunity for homeownership, commercial investment or a buy-to-let venture.
Some lenders don’t tend to extend their criteria to those with a shaky credit history.
However, if you have a good mortgage broker that knows where to look and how to compare the criteria, finding a lender that accepts bad credit isn’t difficult.
It’s no surprise to brokers if you’ve had recent bad credit
A good broker isn’t judgemental and uses their head and heart to help you.
You might be hesitant about speaking to a mortgage broker and divulging your credit history but we get that behind every enquiry for help is a real person who just wants to buy a property.
It’s not them that decides whether you get approved for the mortgage, they’re here to help find you the best lender, submit your application and get you approved. Our team helps countless clients with credit issues, so hearing that you have a CCJ or an IVA won’t horrify them. Really.
The past few years have tested the finances of millions in the UK
Other brokers steer clear of people with bad credit but we welcome them. We’re not going to tut you out of the office for missing a phone payment or going through a period of low income.
Bad credit and borrowing are perfectly normal.
One in 13 adults had a county court judgement against them in 2022.
One in 399 adults entered insolvency in 2022.
47% of adults who have gas or electricity supplied to their homes said they found it difficult to afford their bills between January and February 2023.
The strain on income has resulted in 22% of adults borrowing more money or using more credit between September 2022 and January 2023.
Is poor credit that bad?
Bad blips and dips affect your credit score, impacting your ability to get approved for mortgages, loans and credit cards in the future.
Your past doesn’t necessarily represent your current financial situation though. It’s up to your broker to present your application clearly and accurately to assure the lender you earn enough to pay your outgoings, including the mortgage being applied for.
Remember, it’s not the bad credit alone that is the deciding factor for lenders, it’s how much you earn, how close you are to retirement, the size of your deposit and the stability of your income to name a few.
If the overall picture proves you’re capable of repaying your mortgage and you meet the lender’s criteria, you could get approved despite having severe bad credit issues including defaults, an IVA or bankruptcy.
Getting a mortgage with bad credit is possible
Having bad credit doesn’t make the process of finding a mortgage harder for you, it just means you have fewer options to compare.
You will likely need a deposit between 10-15% but options are available with a range of UK lenders.
You’ll get to know your broker and based on the information you provide, they can start the search and explain how the terms could affect you now and moving forward.
How to prepare for a bad credit mortgage application
Lenders want to know that your current financial situation is on track and under control, so keep spending and borrowing to a minimum and make payments on time.
Know what’s on your credit reports and ask creditors to remove any incorrect information about historical debts.
Increase your income if possible. Ask for an increase in pay from your employer, find additional work if you’re a contractor or increase your prices.
Save a bigger deposit to lower your loan-to-value ratio (LTV).
How can a broker help me?
Going to your bank or current mortgage lender might feel convenient but paying more than you should is inconvenient.
Some lenders charge a higher rate of interest for mortgage agreements that accept bad credit but different options can make a mortgage cheaper overall. Wading through them and learning the pros and cons of each is what our brokers do best.
No matter where you go for advice, always check reviews. A qualified and established broker will want you to read recent reviews to demonstrate their capability to you.
What to expect from a Mortgage Hut broker:
You’ll receive an affordability check to know how much you can borrow. Don’t forget to ask your broker how the lenders calculate your maximum mortgage amount and they’ll be happy to show you the calculations and rules different lenders use. Affordability rules vary from bank to bank, lender to lender.
An eligibility check that won’t affect your credit score
A broker that specialises in bad credit mortgage applications can save you time by checking your eligibility for a mortgage with lots of different lenders in the UK quickly. It won’t impact your credit score but lenders may be able to see if you’ve recently searched for mortgage deals.
Unlike simple comparison sites, they can look at all the factors lenders will analyse and listen to you relay your income, credit history and plans for what the mortgage is for. We find it’s a much more effective way to find you a range of options to choose from.
No conversions about bad credit with multiple lenders
Lots of people get rejected by one or two lenders on the high street and give up because they don’t have access to the range of online lenders or they don’t want to approach another lender and face further rejection.
You don’t need to approach lenders yourself or search online for deals. That’s your broker’s job and you’ll face no judgement from them.
No endless paperwork for you
You can relax knowing your mortgage application has been completed, proofread and sent to your chosen lender without errors. Mistakes on mortgage applications slow the whole process down and if you’re in a rush to buy or have a deadline to meet, your mortgage application must be perfect.
Leave it to your mortgage broker and if more information is needed from you to help with the application, they’ll keep you updated.
Where can I go for bad credit mortgage advice?
We have thousands of reviews from happy people from all walks of life who vouch for an incredible customer experience and a personable, dependable service. When surveyed, 99% of our customers said they'd recommend us, so you're in good hands.
WhatsApp us if you have questions and someone will reply as soon as they can with further information. We also have a quick contact form here if you’d prefer or you’re welcome to call us on 023 8098 0304.