Can I get a mortgage with bad credit? Yes, you can still get a mortgage with a bad credit history, though it can be more challenging. Taking certain steps can improve your chances of securing a mortgage despite poor credit. We’ve outlined some common issues that can affect your mortgage application.
Lenders who work with borrowers with bad credit are usually specialist companies. They will explain the pros and cons of various adverse credit situations.
In some cases, these lenders might ask for a larger deposit, often around 15%, and may charge slightly higher interest rates due to the increased risk.
What is a bad credit mortgage & are they different from other mortgages?
A bad credit mortgage, also referred to as a ‘poor credit’ or ‘adverse credit’ mortgage, is a type of loan provided by specialist lenders to borrowers with a history of financial issues.
These lenders typically charge higher interest rates compared to standard mortgages. They may also require a larger deposit or more equity from the borrower.
How much will a bad credit mortgage cost?
It’s hard to specify the exact cost of a bad credit mortgage.
To reduce the cost, offering a larger deposit is beneficial. Providing a deposit of at least 25% could help you access mortgages with interest rates closer to those offered by standard lenders.
How do you know if you have bad credit?
Some applicants might face a mortgage application rejection, but many will already know about their bad credit history. This should be considered during initial research.
Regardless of your situation, it’s important to get a copy of your credit report. This will show what’s on your file and give you a clearer idea of your mortgage options.
What credit issues will mortgage lenders accept?
Some applicants might face a mortgage application rejection, but many will already know about their bad credit history. This should be considered during initial research.
Regardless of your situation, it’s important to get a copy of your credit report. This will show what’s on your file and give you a clearer idea of your mortgage options.
Who are the best bad credit mortgage lenders?
Mortgage lenders for bad credit are usually specialist companies that offer fewer options but more flexible criteria compared to mainstream lenders. Fortunately, the number of these specialists is increasing each year.
There isn’t a single ‘best’ lender for adverse credit mortgages since each application is evaluated individually. It’s important to find a lender who will consider your specific situation. An experienced broker can assist in finding the right lender for you.
Bad credit mortgage brokers
A bad credit mortgage broker is an advisor who specialises in this area and understands the unique needs of borrowers with poor credit. They can determine whether a bad credit mortgage is necessary and have access to specialist lenders not available through regular channels.
Specialist brokers are familiar with these types of mortgages and the people applying for them. They have connections with lenders that are not typically accessible online or on the high street, offering more options than applying independently with a poor credit score.
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