Looking for a mortgage and have bad credit, see how a mortgage broker can help you
About Mansfield Mortgages
With a great team around us, we make sure that every customer is at the centre of all we do. We have a combined experience of 63 years in the mortgage and finance industry. With modern practices we work with customers all over the country, word of mouth travels far and wide!
Can I get a Mortgage with Bad Credit?
If you are hoping to buy a property or looking for a remortgage for an existing property but you have
been in financial trouble in the past, you may be wondering “can I get a mortgage if I have a bad
credit record?”.
The good news is that it is not impossible to get a mortgage with bad credit, but it can be harder.
Lenders will look at your credit history to determine whether they think you will be able to make the
regular monthly mortgage repayments. But it’s not the only factor that they will take into account
and lenders have different criteria and make different decisions. There isn’t always a product call a
bad credit mortgage but there are lenders who are more equipped and used to lending to people
with a poor or low credit history.
There are fewer lenders for first-time buyers with bad credit or a low credit rating, especially if your
bad credit is severe or recent but you may still be able to get a mortgage, a good mortgage broker
will be able to advise on how you should proceed.
Your credit rating is one of the first things that a lender will check when you apply for a mortgage. A
poor credit score can be an instant warning flag which can prevent or hold up your application. A
lender will want to see more evidence of your finances so that they can ensure that you will be able
to make the monthly repayments.
What is bad credit?
There are many different factors that can determine whether you have had bad credit or not. For
some lenders even a one-off late payment could impact on your credit rating, for others it is more
serious problems such as regularly defaulting on payments, county court judgements (CCJ) or being
declared bankrupt. A high amount of debt can also affect your ability to apply for a mortgage.
What is a bad credit mortgage?
A bad credit mortgage is aimed at borrowers with a poor credit history and rating. Mortgage
providers want to ensure that they will get back the money they lend and so they will minimise the
risk by offering a lower amount of money, higher interest rates and less favourable deals.
Lenders will evaluate your individual personal circumstances and review on a case-by-case basis.
What to do
If you are concerned about your credit history and how it might affect your ability to get a mortgage,
we would advise that you get in touch with an independent mortgage broker who can advise on
which lenders may look more favourably on your circumstances.
Always be honest with mortgage lenders, they will conduct thorough searches and trying to hide
adverse credit will look bad. Having an explanation in why you got into financial trouble and what
you have done to remedy the issue will then help your application.
What are the advantages of a bad credit mortgage?
A bad credit mortgage can help you get onto the property ladder and by paying your mortgage on
time each month you will have the chance to improve your credit rating.
What are the disadvantages of a bad credit mortgage?
Most lenders see this type of mortgage as high risk so they will require a higher deposit and you
won’t be allowed to borrow as much as you would if you had a good credit history. Interest rates will
be higher too when compared to those available.
How to increase your changes of getting a mortgage if you have bad credit
You credit score is built up over a period of time and negative items can stay on your report for
around six years. Improving your credit score is not a guarantee that you will get a mortgage, but it
can increase your chances. There are a few things you can do to improve your credit screen in the
short term:-
1) Register to vote, ensure you are on the electoral role
2) Meet all bill payment deadlines
3) Pay off outstanding debt where possible before trying to get a mortgage
4) Look for an amend any mistakes on your credit report
5) Check for fraud as your score may have been lowered unfairly
6) Cancel any unused credit cards or bank accounts
7) Remove any links to ex-partners or old housemates with poor credit scores
Avoid getting rejected for a bad credit mortgage
Every time you apply for a mortgage or loan and get declined a record of this is noted on your credit
report for future lenders to see. Recent and/or frequent rejections can work against you when
applying for a mortgage as lenders are likely to questions why you have been refused. A broker will
be able to advise on your personal circumstances and select lenders who will look more favourable
on your application.
If you are hoping to buy a property or looking for a remortgage for an existing property but you have
been in financial trouble in the past, you may be wondering “can I get a mortgage if I have a bad
credit record?”.
The good news is that it is not impossible to get a mortgage with bad credit, but it can be harder.
Lenders will look at your credit history to determine whether they think you will be able to make the
regular monthly mortgage repayments. But it’s not the only factor that they will take into account
and lenders have different criteria and make different decisions. There isn’t always a product call a
bad credit mortgage but there are lenders who are more equipped and used to lending to people
with a poor or low credit history.
There are fewer lenders for first-time buyers with bad credit or a low credit rating, especially if your
bad credit is severe or recent but you may still be able to get a mortgage, a good mortgage broker
will be able to advise on how you should proceed.
Your credit rating is one of the first things that a lender will check when you apply for a mortgage. A
poor credit score can be an instant warning flag which can prevent or hold up your application. A
lender will want to see more evidence of your finances so that they can ensure that you will be able
to make the monthly repayments.
What is bad credit?
There are many different factors that can determine whether you have had bad credit or not. For
some lenders even a one-off late payment could impact on your credit rating, for others it is more
serious problems such as regularly defaulting on payments, county court judgements (CCJ) or being
declared bankrupt. A high amount of debt can also affect your ability to apply for a mortgage.
What is a bad credit mortgage?
A bad credit mortgage is aimed at borrowers with a poor credit history and rating. Mortgage
providers want to ensure that they will get back the money they lend and so they will minimise the
risk by offering a lower amount of money, higher interest rates and less favourable deals.
Lenders will evaluate your individual personal circumstances and review on a case-by-case basis.
What to do
If you are concerned about your credit history and how it might affect your ability to get a mortgage,
we would advise that you get in touch with an independent mortgage broker who can advise on
which lenders may look more favourably on your circumstances.
Always be honest with mortgage lenders, they will conduct thorough searches and trying to hide
adverse credit will look bad. Having an explanation in why you got into financial trouble and what
you have done to remedy the issue will then help your application.
What are the advantages of a bad credit mortgage?
A bad credit mortgage can help you get onto the property ladder and by paying your mortgage on
time each month you will have the chance to improve your credit rating.
What are the disadvantages of a bad credit mortgage?
Most lenders see this type of mortgage as high risk so they will require a higher deposit and you
won’t be allowed to borrow as much as you would if you had a good credit history. Interest rates will
be higher too when compared to those available.
How to increase your changes of getting a mortgage if you have bad credit
You credit score is built up over a period of time and negative items can stay on your report for
around six years. Improving your credit score is not a guarantee that you will get a mortgage, but it
can increase your chances. There are a few things you can do to improve your credit screen in the
short term:-
1) Register to vote, ensure you are on the electoral role
2) Meet all bill payment deadlines
3) Pay off outstanding debt where possible before trying to get a mortgage
4) Look for an amend any mistakes on your credit report
5) Check for fraud as your score may have been lowered unfairly
6) Cancel any unused credit cards or bank accounts
7) Remove any links to ex-partners or old housemates with poor credit scores
Avoid getting rejected for a bad credit mortgage
Every time you apply for a mortgage or loan and get declined a record of this is noted on your credit
report for future lenders to see. Recent and/or frequent rejections can work against you when
applying for a mortgage as lenders are likely to questions why you have been refused. A broker will
be able to advise on your personal circumstances and select lenders who will look more favourable
on your application.