Owning your own home is an aspiration for most people, but if you have a poor credit history, it may seem to be a dream which will never become a reality. So exactly what is meant by bad credit? It means you have issues on your credit file, and may therefore be viewed by lenders as a greater risk.
A low credit score is usually seen as bad credit, and you can have a bad credit history for many different reasons:-
- Credit cards or loans in arrears, with late or missed payments
- Missed mortgage or rent payments
- County Court Judgements or Defaults
- Use of Payday loans
- IVAs (Individual Voluntary Arrangements)
- Debt Management Plan (DMPs)
At Mortgage360, our specialist team can help. Different lenders assess suitability based on different factors. We can help you work to improve your credit history, alongside applying our detailed knowledge of the market for bad credit mortgages to help you secure the right loan with the appropriate lender.
What is a bad credit mortgage and/or mortgage broker?
Don’t lose hope! Although mainstream lenders are often less flexible in their approach when outlining their criteria for acceptance for people with a poor credit rating, enlisting the help of a mortgage advisor with the knowledge and expertise to access other lenders who will be more sympathetic to your situation will help.
At Mortgage360, our specialist bad credit mortgage brokers will provide advice on how to take simple steps to improve your poor credit rating. We’ll take the time to listen and understand your individual situation. We’ll use our in-depth knowledge of the market to find the right lender for you, and we’ll work with you to complete the necessary paperwork to optimise your application.
- There are a number of implications for people with bad credit when seeking to secure a mortgage.
- You will probably be expected to put down a bigger deposit
- The deal you secure may be less competitive, with higher interest rates
- It’s important to accept that you may be turned down completely, dependent on your credit record
If you’ve been declined by your bank and the high street lenders for adverse credit reasons, talk to Mortgage360. We have good relationships with specialist lenders and will always give honest and practical advice to help you move forward.
How can Mortgage 360 help you
We pride ourselves on giving honest and practical information. Our specialist team has experience in securing bad credit mortgages, with access to more specialist lenders who will be sympathetic to your application, with the right professional support.
We’ll be with you every step of the way, advising you on how to improve your personal circumstances so you’re viewed in a better light, as well as working with you to complete the necessary paperwork to your advantage. Overcoming a bad credit score and building an improved credit record does take time, but we can also advise on some simple steps which will make an immediate difference.
- Make sure you’re on the electoral roll. You are required by law to register to vote, and the electoral roll is accessed by credit reference agencies
- Make sure your name is on at least some of your household bills, and ensure these are paid on time
- Pay your credit card bills on time, even if it’s just the minimum amount, and try not to withdraw cash using your credit card or use payday lenders
- Don’t make frequent credit applications, these will impact on your credit report
Remember that after six years, most adverse credit items disappear from your credit report – even CCJs and debt management plans. Closing past and dormant accounts may help your record. Many mortgage products for people with bad credit are only available through specialist mortgage brokers and advisers. Talk to us honestly and we can be clear about your situation to the lenders when we’re making an application on your behalf.
At Mortgage360, we stay in touch. We will review your situation and advise if, after time, we could move you to a more mainstream product with cheaper interest rates.
The Mortgage360 process
Mortgage360 offers friendly, impartial and professional advice, with no obligation. We avoid the jargon and provide you with relevant, straightforward and honest advice, based on your individual situation and preferences.
We listen – total transparency is vital! We’ll provide you with a completely bespoke service, advising you on the most relevant products for you. We can also devise a portfolio of accompanying products such as life and income protection insurance, based on your budget and your family circumstances. We work remotely, providing our services to clients right across the UK.
Step One – We get to know you. We listen to what you need, so we can recommend the right products
Step Two – We build a profile of your needs, and then we search our panel of lenders to find the right products to match your requirements
Step Three – We worry about the paperwork – we go through everything in detail with you, then once you are completely happy with everything, we make the arrangements for you
A brief intro to the team
Our service doesn’t end there. We keep in touch, checking the products you have to continue to meet your needs as your personal and financial situation changes with time. If you would like a no-obligation chat to discuss your personal requirements, contact Mortgage360 today.
– What is a bad credit mortgage?
Bad credit or adverse credit mortgages work just like any other mortgage in practice, except they may be more difficult to secure, will come with higher interest rates and deposit requirements as well as lower limits on how much you can borrow and even higher arrangement fees.
– How much deposit do I need for a bad credit mortgage?
You will be viewed as a higher risk by the mortgage lenders when applying for a bad credit mortgage, so you may have to provide a larger deposit in the region of 20-25% rather than the usual 5-10%, depending on how bad your credit profile is, or has been in the past.
– Which lenders offer bad credit mortgages?
This will depend on your personal circumstances. A bad credit mortgage broker will advise accordingly.
– What if I am a first time buyer with bad credit?
The same rules apply. Bad credit mortgage lenders will look at why you have bad credit, when it happened and how you resolved the issues. As an example, missed or late payments won’t be viewed in the same light as a more serious issue like a CCJ. Our mortgage specialists can advise.
– How about self employed people with bad credit?
It’s a challenge to get a mortgage with adverse credit, but not impossible, and the right bad credit mortgage broker can help, guiding you and advising on your application. Contact Mortgage360 for a no-obligation chat.