BAD CREDIT MORTGAGE
Updated 21st May 2021.
Bad Credit Mortgage Advisors
Have you struggled to get a mortgage because of an adverse credit history? The Mortgage Experts Online accredited bad credit mortgages advisors make it easier for you to find a mortgage regardless of your credit record. Our bad credit mortgage advisors work with many customers who want to know how to get a mortgage with bad credit. Therefore, if you’re wondering that yourself, you’re in the right place. Fortunately, the mortgage market is vast and expert advice is close at hand. Conditions for applicants have changed significantly for the better in recent years, making bad credit mortgages more achievable now than ever.
If you need a mortgage advisor for a bad credit mortgage, do not hesitate to get in touch with us today! Similarly, fill out a form online, or give us a call on 0300 124 5655
Scroll down for more information and FAQ’s.
- What are adverse credit mortgages?
- How can Mortgage Experts Online help me?
- Can I get a bad credit mortgage with bad credit history?
- What is a bad credit mortgage lender?
- How much deposit will I need for a bad credit mortgage?
- I have bad credit can I get a mortgage large loan?
- Can I get a bad credit mortgage with no deposit?
- What can I do to help get a bad credit mortgage?
- Do I need a mortgage broker for a bad credit mortgage?
- Will I need a high income for a bad credit mortgage?
- If I have personal assets will this help me get a bad credit mortgage?
- What are the fees involved in a bad credit mortgage?
- Can I apply for a bad credit mortgage direct with the lender?
- Do i need to be credit checked for a bad credit mortgage?
- Can I get a bad credit mortgage with a high street lender?
- First time buyers and bad credit mortgages?
- Can I get another mortgage with bad credit?
What are adverse credit mortgages?
Bad credit mortgages were developed to help people with an adverse credit rating to obtain a mortgage. You may also know them as sub-prime mortgages or adverse credit mortgages. These terms all relate to the same type of arrangement and are effectively interchangeable.
Unfortunately, the interest rates on bad credit mortgages can be higher than they are on mortgages with high street lenders. This is a result of the perceived extra risk to the mortgage lender.
The specialist lenders who are looking for bad credit mortgage business tend to be more flexible in their underwriting. For instance, many of them don’t credit score but instead credit profile.
How can Mortgage Experts Online help me?
Many consumers believe that if they have a poor credit rating, or because of previous adverse credit, they will be unable to get a bad credit mortgage. This is simply not the case. In fact, there are many options available to clients looking for a bad credit mortgage. The trick lies mostly in where to look. Sure, if you are behind on credit card payments or have suffered bankruptcy at some point, your credit rating will not be ideal. But there are still plenty of things that you can do that will help you get a mortgage for the property you want to buy. Above all bad credit mortgages are extremely common and with the right advice can help you with your property goals.
Can I get a mortgage with bad credit history?
Getting a bad credit mortgage is very much possible, if you go about it in the correct way. The high street lenders generally do not accept applications with bad credit. This can be down to several factors:
- Having bad credit has reduced the credit score.
- The bad credit is outside their criteria.
- Having bad credit makes the case look weak and is declined by the underwriter after initially passing a decision in principle.
If you have been declined by a high street lender, do not worry. The mortgage experts we work with have placed many of these cases. If you have had previous bad credit speaking to our experts will give you the best chance of getting a mortgage.
What is a specialist lender?
Most high street lenders rely on their own internal credit score, and this is different for each lender. If you have had bad credit, this will tend to bring down your credit score and fall outside of the lenders internal score. The reason many high street lenders do this is down to the volume of business they receive, and they don’t have the time to look at each case, it’s either pass or fail.
The specialist lenders and some building society’s work slightly different. They will manually underwrite your application and not credit score. A bad credit mortgage lender will set out their criteria of the bad credit they are willing to accept.
How much deposit will I need?
With any UK residential mortgage, the minimum deposit is 5% for a buy to let property there are options available for 15% and this included limited company buy to lets (SPV). If your adverse is only minor, then you would need between 5-10% with a specialist lender.
The heavier and more recent the adverse, you will need a minimum of 15% deposit. If you have had a very recent bankruptcy/repossession or IVA, then you could need up to 30% deposit. Bad credit mortgages criteria are changing all the time, for the most up to date information call us or complete our quick enquiry form.
There are shared ownership mortgages with lower deposit levels. Read our article on shared ownership mortgage to find out more.
I have bad credit can I get a large mortgage loan?
Yes, most bad credit mortgages lenders have a maximum borrowing limit and it is very much dependent on:
- Loan to value
- The overall strength of the case
You will need a specialist bad credit mortgages broker to help you with this, some lenders will go outside their criteria on a case-by-case basis.
Can I get a mortgage with no deposit?
This is going to be difficult. Apart from a couple of shared ownership mortgage lenders there are no 100% mortgages for people with bad credit. The mortgage guarantor option is also aimed more towards clean credit customers and not people with bad credit. Bad credit mortgages are more complex, and you will need some form of deposit. An increasingly popular way is a gifted deposit from family members. to read all about gifted deposit mortgages click here
What can I do to help get a mortgage?
1. Obtain a copy of your credit report
This is the first thing you should do. The three main credit referencing agencies are Equifax, Experian & Transunion. Each agency will hold slightly different information on you, as creditors only report to two of the three credit referencing agencies. Check my file will show you the information on all three, this will give your mortgage expert all the information needed to be able to present your case to the best lender. Also, by checking all three you can see if there’s any information which is incorrect or potentially fraudulent. A common example is moving to a new house and not paying off a utility bill and there being a small default registered at an old address.
The more deposit you have will give you more options and access to better rates. The lower the loan to value the lower the perceived risk to the lender. Deposit can be from your own monies, gift from a family member, inheritance or any other legal source accepted by the lender.
3. Electoral Role
If you’re not on the electoral roll, we suggest you register as soon as possible. The mortgage lenders will always check this. The reason they do this is to ensure that there is not any undeclared adverse credit registered at a different address.
Do I need a mortgage broker for a bad credit mortgage?
If you are trying to get a bad credit mortgage, then seeking the help of a mortgage broker is vital. All the experts we work with are whole of market and offer unbiased advice. You will need someone who is experienced in dealing with specialist lenders, and who knows their criteria inside out. All the experts we work with are whole of market for protection insurances – this ensures you; your family and your property are fully covered.
For the most up to date information call us or complete our quick inquiry form.
Will I need a high income for a bad credit mortgage?
This will be down to how much you need to borrow. Typically, loan to income levels are the same as high street lender, and in some cases higher (depending on lender and product). Specialist lenders do tend to have minimum income levels and age limits, with the majority of specialist lenders minimum age being 21 years old at time of application. Some lenders will lend you more if you are on a higher income; for example, if you earn over 50K some lenders will go to 5x income, and there are some lenders who will potentially do 6 x income if you earn a combined salary of over 100K.
If I have personal assets will this help me get a mortgage?
Because the bad credit mortgages lenders manually underwrite each case, the more assets you have such as, savings, investments, or equity in other properties, this will strengthen your case with the lender. The specialist lenders will potentially see you as being less of a risk if you aren’t living from one month to the next.
What are the fees involved?
Generally, with a specialist lender there will be fees involved – especially with a property purchase. There are some lenders that offer products that include free valuation & no arrangement fee; however, the interest rates are higher. The typical fees tend to include.
- Lender arrangement fees
- Valuation fees
- Booking/application fees
- Stamp duty
- Legal fees
- Mortgage exit fee – when repaying the entire mortgage
- Early repayment charges – If finishing the mortgage during the initial term
Can I apply for a bad credit mortgage direct with the lender?
Most of the specialist lenders only deal with mortgage intermediaries (mortgage brokers) – the reason being that specialist lenders are smaller in size, which means they only want to be getting applications for business they want. Also, because of the bad credit it needs a mortgage specialist to make sure it placed correctly.
Applying for a mortgage online is extremely common, with most lenders having mortgage portals where documents can be uploaded. It is quite common to not actually meet your broker; however, your broker can always contact your via skype or facetime if you wanted to see their faces. In truth, most clients prefer to deal with the mortgage expert via the telephone and email.
Do I need to be credit checked?
We are often asked the following questions:
- Can I get a bad credit mortgage with no credit checks?
- Can you guarantee I will be accepted for a bad credit mortgage?
- I only want to apply if it’s guaranteed, my own bank declined me, can you promise that?
No one can ever guarantee you will be accepted.
There are too many variables when it comes to being accepted for a bad credit mortgage. However, a mortgage advisor can help to ensure that:
- You fit the lender’s criteria.
- The mortgage is affordable based on your incomes.
- You are aware of the process and timescales involved.
- They have fully assessed your documents prior to submission of a mortgage application.
Every lender will either credit check or credit profile all customers – once at the decision in principle stage and a hard search on full application.
Can I get a bad credit mortgage with a high street lender?
Some high street lenders will allow some bad credit –this typically needs to be historic, and if still on the credit file the debt will need to be satisfied. As a rule, if the bad credit is over 3 years old and satisfied then there are certain high street lenders who will accept your application if you pass their internal credit score.
Your bad credit mortgages expert will know each lender’s criteria and will be able to place you with the best lender for your circumstances.
First time buyer’s mortgages with bad credit.
Yes, however, this will depend on the credit profile of the applicants. For example, if you have only had 2 credit accounts and both have defaulted this is going to make the lender more concerned about you meeting any mortgage payments. The more deposit you have the less perceived risk to the lender.
Not all lenders will offer access to the government schemes such as Help to Buy or shared ownership. Where the Help to Buy scheme has helped some clients who only had 5% deposit. This has been noticeable and certainly opened more mortgage avenues to first time buyers.
Can I get another mortgage?
If you already have a residential mortgage and are looking at getting another residential mortgage, this can be tricky if you have bad credit.
If you have clean credit or bad credit you will still have the same obstacles.
- Loan to value on the 2nd property
- Affordability assessments
- Income requirements
- Reason for 2nd property
Any lender will have to factor in all these things, and with a bad credit mortgage lender they will ask more questions and because of the specialist nature there will be less options than if you had clean credit.
But it is not impossible and the mortgage experts we work with be able to give you all the information you need and do the due diligence before submitting any application.
Speak to a bad credit mortgage advisor.
A bad credit mortgages expert will be able to listen to your circumstance, check your credit report, run affordability, and come back to you with the best deals for your circumstances.
We understand that this is time critical, in most instances people have seen a property, put an offer in, gone to their bank and been declined. At this point you could be a week or 2 into the process and no further forward. The experts we work with will be able to work as fast you allow them – from the initial call your bad credit mortgages expert could obtain a decision in principle for you the same day.