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bad credit mortgages

Can I get a mortgage with bad credit?

Trying to get a bad credit mortgage isn’t going to be easy. But don’t worry, readers! Read on to find out how you can do just that! 

Got a bad credit score? Think this means that your hopes and dreams of getting a mortgage are all but finished? Then you are mistaken! Although they’re not the best option in the world when you’re buying a home, getting a bad credit mortgage can be a more than viable option for loads of UK property buyers. Let’s look into this a little further!

What is a bad credit mortgage?

If you’ve previously had trouble making repayments on bills and previous mortgages this is going to have had a negative impact on your credit score. What this means is that a lot of mortgage lenders are going to view you as an irresponsible borrower and a risk to lend money to. This means that they need to find a way of mitigating this risk, which is usually done by lenders charging higher interest rates.

How do I go about applying for a bad credit mortgage?

If you’re in a position where you’re behind on mortgage repayments, utility bills and other financial commitments it’s going to be tricky to get a mortgage. But the good thing is it’s still possible!

Your mortgage lender is going to start off by checking your affordability. What this means is that they’ll assess your income, current outgoings and of course, your credit history. This means that they’ll be checking to see if you’ve ever been bankrupt, have struggled to meet previous repayment commitments and if so, how serious this has been.

Different issues have different effects on your ability to borrow. The older the credit issues the less relevence they will have. Recent missed mortgage payments will be viewed far worse than missed mobile phone payments. Entering into a voluntary arrangement will be less intrusive than registering for bankruptcy. 

To make it more complicated, the specialist lenders all have their niches & time constraints so, using a specialist mortgage broker is almost definitely the best course of action.

How can you give yourself a better chance of getting a mortgage?

So, aside from all the doom and gloom, that’s associated with bad credit mortgages, how can you give yourselves a better chance of getting a deal that you really want? The great thing for you is that there are loads of ways to do this. Let’s take a look at what you can do!

Putting down a large deposit

If you feel like your finances have recently improved then this could be a great way for you to get a better interest rate on your bad credit mortgage. The truth is that lenders love it if you put down a large deposit on a home, roughly in a region north of 20%.

The larger the deposit or equity in a property the safer the lender's money is. If you have a decent amounty of equity & default on your payments, resulting in repossession the lender is almost certainly able to recoup the amount they loaned plus costs. This won't be the case if there is only a small amount of equity in the property.


Help from a family

While this won’t necessarily improve your credit rating, having help from a loved one can be a real lifesaver when you’re going for a bad credit mortgage. This can come in loads of different forms. For example, you may have a cash deposit gifted to you by a family member. Before we continue, don’t overlook the word ‘gifted’, it’s really important. If someone gifts you a sum of money then they will need to sign a form to say that they have absolutely zero expectation that you must pay the money back in any way shape or form. Sounds great, doesn’t it?

If you feel like you would like to pay the money back at some point this is possible, but the important thing to remember with gifted deposits is that there is absolutely no obligation to do so!

Clean up your credit history

Make sure you check your credit report to ensure you are truely guilty of whats showing against you. If it's not then get it sorted.

Cancel any unused credit cards that you have sitting there with zero balances.

Ensure you are on the electoral role & it's showing as such on your credit report.

How can a mortgage adviser help?

This is where we step in. At Mortgages Online we compare a whole host of mortgage deals from a wide variety of different lenders. This means that we can find the best bad credit mortgage for you. And it’s all so easy! We’re a completely free service so there’s no need to use a credit card.


Laura Waller

Laura Waller has been working in the mortgages industry since 2013, joining an independent brokerage in Essex. Laura has CeMAP 2 & 3 – Certificates in Mortgages Advice and Practice. Since then Laura oversees marketing for Mortgages Online, using her experience and expertise to write articles and blogs about mortgages and related topics.

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