Adverse Mortgage Brokers & Advisers – Helping you get a mortgage with bad credit!
There’s a common misconception that mortgage companies will never lend to those with a poor credit history. While getting a mortgage in today’s market can be tough if you have bad credit, it isn’t impossible. In fact, an increasing number of lenders assess mortgage applications manually and accept these applications.
Though having a credit record that is less than squeaky clean may limit your options, you certainly shouldn’t give up hope of ever purchasing your own property if you have encountered financial difficulties in the past. There are many of bad credit mortgage lenders who will offer specialist products which are more flexible with criteria. Bad credit mortgage lenders will even consider cases from individuals who have had arrears, defaulted payments, county court judgements(CCJs), individual voluntary arrangements (IVAs), been placed on debt management plans or suffered bankruptcy in the last six years.
The deals you might be offered might have a higher interest rate when you first take out the loan, as the provider will automatically consider you to be a higher risk. But if you keep up your repayments, and take active steps to improve your credit rating, there’s no reason why you can’t find yourself in a much better financial position in the months and years to come – We could even look at moving your from your bad credit mortgage lender to access a much better deal when you eventually come to remortgage your property. Our specialist team assist many adverse credit clients every year, so you’re in safe hands. We are able to help with the affordability assessment, the full application process, negotiate with lenders and support you throughout, so give us a call today.
Credit Reports & Credit Scores Explained
Technically, there’s no such thing as a general ‘bad credit’ score. This is because credit scores are calculated in different ways by the UK’s credit file reference agencies – the main ones being Experian, Equifax and TransUnion. You’ll find that each of them provides a report and a numerical ‘score’ based on their own system, which bears no relation to the others, so it’s not easy to make a broad comparison and it could be that one company is using information that is out-of-date, hasn’t been updated or not considered by the rest. The view of any score will also vary according to which lender is looking at it, as some lenders will interpret scoring in different ways to others.
Any adverse credit issues themselves that will make a huge difference. Sadly, some lenders will view the slightest fault on your credit history – such as a late payment on a utility bill, or a missed credit card instalment – as being indicative of poor money management, and will consider you a higher risk.
To help companies make better lending decisions, the three main credit agencies listed above will analyse all your credit data to calculate your overall credit rating. They will assign you a score between 300 and 999, and it is this score that will help lenders determine what kind of borrower you are.
The lower the score, the higher the risk to a lender, this is where bad credit mortgage lenders come into their own, there will not just go by the face value of your credit report, they will look into why your credit is the way it is.
Check your credit score today!
Each credit reference agency calculates your credit rating slightly differently and has a different scoring system. Which means that what counts as a good credit score will depend on which of the four major agencies your lender uses. Experian, Equifax, Crediva and TransUnion, each credit agency could have different information showing, therefore, we have teamed up with Check My File. They not only offer a free 30-day trial but they also have all 4 agencies above showing on the one report which means any issues affecting your credit rating can be easily picked up by one of our mortgage advisors.
In order to obtain your report, click on the below link to get a 30 day free trial with CheckMyFile and download your report, after the free 30 day trial they will charge £14.99 per month & this subscription can be cancelled anytime.
Provide us with a credit report today, and uncover the issues that could be affecting your credit file! CLICK HERE to access your free credit report with the four top credit agencies all in one report!
What is a specialist bad credit mortgage?
There is no such thing as a bad credit mortgage. It’s simply a term used to describe the kinds of mortgages for which you are likely to be approved if you have a bad, or poor, credit rating. A lender who deals with bad credit are usually a specialist niche-market lending companies. While still operating under the same rules and regulations as the mainstream providers, so your rights and your home are no less protected, they use far more flexible criteria, consider all kinds of situations and adopt a realistic approach to each applicant’s case.
How to get a mortgage with poor credit…
If you have a bad, or poor, credit score and need to apply for a mortgage, the first thing you will need to do is check your credit score so you understand where you are starting from and what lenders will see when they run your credit report. You could find that your score isn’t as bad as you thought, and you are eligible for a standard mortgage or you may find errors on your report that need correcting, resulting in an improved credit score without you having to do anything.
Next, you need to create a budget that includes all your income and expenditure. Be honest with yourself here because otherwise you risk thinking that you can afford larger mortgage repayments than you actually can. Include everything you spend money on, down to the coffee you buy yourself on the way to work in the morning. Once you know how much you spend each month, you will have a realistic idea as to what you can afford to spend each month on a mortgage.
Use this figure to start looking at potential mortgages and mortgage lenders. This is a ideal time to give us a call. One of our experienced advisors will go through your finances with you, helping you to work out which mortgages you can apply for and the size of deposit you’ll need. If you aren’t ready to speak to us yet, we have a really useful mortgage calculator on our site that’s free for you to use.
Avoid any hard searches as these could negatively impact your credit score and your chances of getting approved. When you are ready to apply, only apply for mortgages you are likely to get approved for – remember, just because you have bad credit and you’re applying for bad credit mortgages, it doesn’t mean the lender will say yes. For the best chance of getting accepted and getting a mortgage, you need to speak to a bad credit mortgage broker who is whole of market, even if they are unable to find a mortgage for you right now, they can advise you on how to improve your credit score, how to get your credit report, how to manage any late payments, credit problems and how to get onto the electoral roll.
The Benefits of Working with Alexander Southwell
- Expert Mortgage Advisor – Our in-depth expertise and vast experience of financial services will ensure we offer a unique total solution to our clients.
- Mortgage Rates – This includes knowing the types of mortgages that are available, including the bad credit mortgage sector, and the type of lenders that would be willing to take a risk on a borrower with bad credit. At Alexander Southwell Mortgage Services, we have access to thousands of bad credit mortgages and exclusive specialist mortgage products not available on the high street.
- Time saving & Hassle Free – our specialist mortgage advisers can save you time and money by offering related financial advice. This may include helping you find buildings and content insurance for your new home or other types of insurance which could reduce the risk of your losing your home if you can’t make repayments, for example, critical illness, life insurance and income protection insurance.
Frequently asked questions – Bad Credit Mortgage Broker
Will my monthly payments be higher due to my poor credit?
When you are approved for a bad credit mortgage, you will be expected to make monthly repayments of an agreed amount. It’s important that you make these repayments, on time, every month. Make sure you stick to your budget so that the money earmarked for mortgage payments is always available.
We can help you budget to make sure you keep up repayments to your mortgage lender. It’s impossible to give an exact figure for how much more than a conventional residential mortgage a bad credit mortgage will cost. The main factor to drive down the cost of the mortgage will be a high deposit therefore allowing the lender to offer you slightly better interest rates.
What deposit will specialist lenders ask for when applying for a mortgage?
A lender who is only lending 75% of the property value, has a lot less risk than a lender who is lending 95% of the property value, and here’s why – Repossession. The worst case scenario for any mortgage is a repossession, this is when a lender seizes the property and sells it due to failure to comply with the mortgage offer, this can include missing mortgage payments.
When a lender sells a property, the majority of the time it will go to auction to get a quick sale, freeing the lender’s funds tied up in the property, which then can now invest into new clients. Selling a property at auction is quick, but the lender might miss out on the full market value, a lender essentially trades time with property value, this is where your deposit comes into play, the higher the deposit, the less risk.
If your credit issues are comparatively minor – and if they took place a matter of years, not months, ago – there may be lenders in the wider market who will consider a loan to value (LTV) of between 90% and 95%. However, if your credit report contains more severe marks, such as IVAs, late payments, repossession orders or bankruptcy notices, and these took place within the last 3 years, you should expect to have to put down closer to 25%.
Does being married to somebody with adverse credit give you a bad credit history?
Being married to someone with bad credit doesn’t automatically give you bad credit. However, if financial accounts are taken out jointly, this will create a financial connection which can sometimes affect the other person’s credit history and how they are viewed by lenders. Taking out credit with a partner who has bad credit could ultimately result in your application being declined or approved at a higher rate.
Can I get a mortgage if I’m on a debt management plan (DMP)?
You need to bear in mind that if you are planning to get a mortgage on a debt management plan, your income multiples and credit history may be affected – and it’s these multiples that ultimately determine how much you can borrow. Somebody with a clean credit file and no DMP may be able to obtain up to five times their income, whereas an individual on a DMP may only be offered four times or less this total.
Can I remortgage with bad credit?
You will be able to access a better range of interest rates if you can settle as many of your outstanding debts as possible before your mortgage is up for renewal, if you’re concerned that your bad credit history may affect your remortgaging prospects – or you are worried that having little to no credit activity might hinder your chances of securing good terms – speak to us here at Alexander Southwell well before your existing term is due to end and we can provide you with whole of market advice.
Bad credit Mortgage Brokers
Our specialist bad credit mortgage brokers understand the obstacles you’re facing. But perhaps more importantly, they have the knowledge, the experience and the contacts to greatly improve your chances of finding a mortgage that will support your longer term goals.
We have access to the whole of the market, which means we can source mortgage offers from niche lenders with more flexible eligibility criteria than many of the high street banks.
Contact us today to book your free, no-obligation consultation at a time that suits you. Evening and weekend appointments are available.