Home Mortgages Protection About us Contact us Bad credit mortgages Home Mortgages Bad credit mortgages Bad credit (also known as adverse or impaired credit) mortgages are mortgage deals designed specifically for applicants that have had trouble repaying financial commitments in the past. Our in depth guide looks at what you can do to improve your chances of getting a mortgage with bad credit approved. In this article Can I get a mortgage with bad credit? How to get a mortgage with bad credit Should I wait for my bad credit to disappear? I'm a first time buyer with bad credit. Can I get a mortgage? Remortgaging with bad credit Can I get a mortgage with bad credit? Getting a mortgage can be challenging when you've had credit problems in the past but it's not impossible. Whilst most high-street banks are out of the equation, there are a number of lenders that specialise in mortgages for applicants with bad credit. Typically, these are building societies that look upon applications sympathetically often using manual underwriting to assess each application individually. Applicants with adverse credit will require larger deposits (or in the case of a remortgage, greater equity) and attract higher interest rates reflecting the potential risk they carry. When lenders assess bad credit, they look at the following: The number of accounts that have adverse information recorded against them The date the adverse information was recorded. Fewer mortgage deals will be available to those with recent late payments, defaults or CCJs The seriousness of the adverse information. A single late payment will be looked upon more favourably than a default or CCJ If the default or CCJ has been satisfied Whether the financial commitment is secured or unsecured against your home If the adverse information relates to telecommunications or utility account How to get a mortgage with bad credit The good news is that there are a number of steps you can take to improve the chances of your application being approved. Make sure you're on the electoral roll Registering to vote can boost your credit score immediately as it helps lenders verify your identity and prevent fraud. Registering takes only five minutes and can be done on the GOV.UK website. Increase your deposit Putting down a higher deposit reduces the risk to the lender in the event of repossession. If you can't find a bigger deposit, consider buying a cheaper property. A 25% deposit (or 75% LTV) will see more deals available to you. Reduce your income to loan ratio Reducing your income to loan (or debt) ratio will show that your mortgage repayments are affordable. A higher income multiple may harm your chances of getting a mortgage approved, particularly with recent adverse data. Check your credit file Get a copy of your credit file and check its accuracy before applying. If you spot a mistake, talk to the financial institution concerned to have it rectified. You can also raise a dispute with TransUnion or enter a Notice of Correction. It is also a good idea to check the date a default or CCJ was registered. Backdating a negative marker could improve your chances of getting a mortgage approved. Let your adverse information age Lenders are more likely to approve your application if you can demonstrate that your credit problems are behind you. Allowing bad credit to age will lower the deposit requirement and result in better interest rates. Whilst some lenders will consider recent late payment and defaults, your options will increase after 2 and 3 years. Should I wait for my bad credit to disappear? Negative information will remain on your credit file for six years after the date it was registered but that doesn't mean that you need to wait for it to disappear before applying for a mortgage. A number of lenders will consider your application if you can demonstrate that your credit problems are in the past and you're consistently making repayments towards your outstanding financial commitments. Some lenders will consider adverse information that is just a year old but your options will increase once they're 2 or 3 years old. It's important you speak to an impartial mortgage broker like Premier Mortgage Services to improve your chances of success. I'm a first time buyer with bad credit. Can I get a mortgage? The answer is yes! Provided your bad credit is in the past and you have a big enough deposit, you won't be disadvantaged simply because you're a first time buyer. Remortgaging with bad credit While remortgaging with bad credit is possible, you will need sufficient equity in your home or repay some of your loan to take advantage of the more competitive rates on the market. This will of course depend on how recent your credit problems were and whether there are any mortgage arrears. You could also speak to your existing lender to see if there are any better deals available or stay put until your credit score improves. Request a call back 0115 9499988 Place your confidence in our experts to secure your next mortgage. Submit your details for a free telephone consultation. Depending on your circumstances a fee between 0-1.5% of the loan amount may be payable. A typical fee is £350. We source from the whole of the market for mortgages and from a panel of providers for insurance. Your home may be repossessed if you do not keep up repayments on your mortgage. Premier Mortgage Services is a trading name of Premier Mortgage Services (Nottingham) Limited, which is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No 3476608. Registered office: 10 Derby Road, Stapleford, Nottingham, NG9 7AA. © 2021 Premier Mortgage Services Cookies policy Privacy policy