Can you get a mortgage with bad credit? We’re taking a deep dive into this topic

Can you get a mortgage with bad credit? We’re taking a deep dive into this topic

Missed some credit card payments? Been issued with a county court judgement? Or do you have little-to-no credit history?

While these things can affect your credit score, they don’t necessarily stop you from getting a mortgage.

“It goes without saying that you should always try to avoid or minimise any blemishes on your credit history,” Jo Jingree, award winning mortgage adviser at Mortgage Confidence says. “And while behaviour like the above can lower your credit score, life happens — and lenders know this. So it’s definitely worth a chat to run through the best options for you and your circumstances.”

Let’s talk facts

If you’re worried about your financial situation, you’re not alone.

According to a recent Kensington Mortgage webinar Jo attended, 29% of people are feeling really worried about their finances over the next year or so. While 4% of people said things are already bad and can’t get worse.

Plus, Legal & General’s latest report has revealed that the average UK person is just 19 days away from the breadline.

So, if you’re credit impaired but looking to get a mortgage, we’re taking a deep dive into the questions you’ll most probably want to know.

Can I get a mortgage with poor credit history?

The short answer to this question is: potentially!! However, it really does depend on each circumstance and lender. But that’s where a mortgage adviser can help find the best deal for you.

Jo explains: “As we’ve seen with the cost of living crisis, the unexpected can happen which leads us into financial difficulties. But if you have found yourself in debt or with a poor credit score, there are specialist lenders who offer mortgages designed for people with bad credit. Having a poor credit history might just mean you have fewer lenders who are willing to lend to you. You might also have to pay higher interest rates.”

What is considered impaired credit?

Lenders use your credit score to help them decide how likely it is that they will be repaid on time if they give you a loan – like a mortgage or credit card.

The score is personal to you as it’s built on your credit history. Your credit history will include your total level of debt, your repayment history, your number of open accounts and other factors.

According to the Financial Conduct Authority (FCA), impaired credit related to someone who has:

  • Within the last two years owed overdue payments, in an amount equivalent to three months’ payments, on a mortgage or other loan (whether secured or unsecured), except where the amount overdue reached that level because of late payment caused by errors by a bank or other third party
  • Been the subject of one or more county court judgments, with a total value greater than £500, within the last three years
  • Been subject to an individual voluntary arrangement or bankruptcy order which was in force at any time within the last three years.

Unfortunately, it can be easy for small blips like a missed payment on a credit card or mobile phone to happen. And while it can lower your credit score, it doesn’t always prevent you from accessing the high street lenders. Which is why it’s important to speak to an adviser to find out your options.

But remember — your credit score isn’t fixed. There is plenty you can do to get it back on track. Jo suggests using Check My File, to check your credit score.  This takes data from the three main credit bureaus, Experian, Equifax and TransUnion. You can get a 30-day free trial and after that you will be charged £14.99 per month but you can cancel at any time.

Talk to us

There is never any judgement here at Mortgage Confidence. We know sometimes large credit card bills, missed payments or defaults happen for a range of reasons including when we are made redundant, or have to give up work to care for a sick family member.

But we are here to help you find your way out of this situation and buy a home.

Jo works closely with a large number of specialist lenders who accept those with low credit scores, defaults, county court judgements, mortgage arrears, missed payments and bankruptcy.

So do get in touch for a 30-minute free no-obligation phone call to establish your options.

 

Please be aware that by clicking on to some of the above links you are leaving Mortgage Confidence Ltd website. Please note that Mortgage Confidence Ltd nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.

 

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