Types of bad credit:
Missed payments, IVAs, CCJs and bankruptcies
In recent years, getting a mortgage has become more and more difficult not only due to increased house prices but also the tighter criteria imposed by lenders following the mortgage market review.
No matter what size of deposit you have, or the nature of the property you wish to buy, if you have a poor credit rating it can often feel very disheartening when trying to obtain a mortgage, with a limited number of lenders willing to consider your application.
Having a mortgage application rejected will worsen your overall credit score. Therefore, if you feel you may struggle to obtain a mortgage due to issues with your credit history, you should seek advice from a mortgage broker before making an application.
At FinanceMe we treat every client as an individual and aim to make it easier for those with adverse credit to secure a mortgage, whether you’re a first time buyer or a homeowner looking to remortgage or move to reduce your outgoings and address your financial position.
We have strong associations with lenders who are more understanding of adverse credit and we will start by being able to give you independent advice about your ability to get a mortgage so that you don’t worsen your position by applying to a lender and having your application rejected.
What causes adverse credit?
There are a number of factors that contribute to your credit score, some of the most common reasons people have poor credit ratings include:
- Missing a loan, credit card or mortgage payment
- Having an ongoing loan with a payday loan provider
- Being declared bankrupt or entering into an individual voluntary arrangement (IVA)
It’s also worth noting that if you have never taken out credit for anything, you may well find yourself being rejected for certain finance items – because you haven’t yet built up a record of credit.
Can I get a Mortgage with bad credit?
Yes, it’s often possible to get a mortgage with a bad credit history, although your options may be limited. Lenders will conduct a credit check on anyone applying for a mortgage. However, some black marks on your credit history will carry more weight than others, depending on the amounts of money involved and how much time has passed.
If you have a bad credit history, some high-street banks may refuse to give you a mortgage outright. Building societies can sometimes be more flexible and there are also specialist bad-credit mortgage lenders, some of which cater specifically for people who’ve faced illness, divorce or other difficult life events. These lenders tend to be more flexible when assessing your mortgage application, but often charge higher-than-average interest rates and require larger deposits in return.
How we can help you
We haven’t included the big-name banks as they don’t offer any mortgages specifically for people with bad credit. However, they do consider applications on a case-by-case basis so don’t automatically write them off without talking to a mortgage broker about your options.
We do however have a range of products to consider.
Thing to consider
Should you buy a house with bad credit or wait to improve my score?
While it may be technically possible for you to get a mortgage when you have a poor credit history, you also have the option of trying to improve your credit score first, in order to increase your chances of getting accepted for a ‘normal’ mortgage. Here are some of the pros and cons of getting a bad credit mortgage: Pros Plenty of choice:
Mortgage deals available to customers with poor credit Faster home ownership: you’ll start your journey to homeownership sooner if you take out a bad credit mortgage instead of waiting Cons Higher rates: you’ll often have to pay higher interest rates if your credit history is poor Bigger deposit: you might have to buy with a higher deposit to secure a mortgage with bad credit
Plenty of choice:research has found over 1,600 mortgage deals available to customers with poor credit Faster home ownership: you’ll start your journey to homeownership sooner if you take out a bad credit mortgage instead of waiting
Higher rates: you’ll often have to pay higher interest rates if your credit history is poor Bigger deposit: you might have to buy with a higher deposit to secure a mortgage with bad credit
What do our customers say about our services?
Your funding is just a few clicks away - Get in touch
Fill out the contact form, and we’ll get in touch
Why work with FinanceMe? We’ll tell you...
Relax your good hands! we offer a fast and simple way to search for finance
We compare the market, but unlike other comparison sites, we be service provider and advising firm. We do not pass you onto 3rd parties, It will be us you’re dealing with.
We are not just a mortgage broker, we offer a wider range of specialist products for you. Our friendly and highly professional team is on hand to guide you through the process from start to finish.