Adverse Mortgages

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 Finance-Store 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.

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.

We will look at the entire mortgage market and compiled the best rates available on bad-credit mortgages.

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.

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

Pros

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

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

WE WILL CALL YOU...