Stepping onto the property ladder when you have a history of bad credit

Owning our own home is the epitome of living the dream for many of us. Having the choice of where to live, establishing long-term roots, and being able to decorate and make changes as we see fit is something that many of us long for. But being able to buy your own home will depend on your current income, as well as your previous credit score. Thousands of people are left paying expensive rent repayments because they may have had a poor credit history. They may be worried that they will not be accepted for a mortgage because of their bad credit.

As experienced mortgage advisors, you may be surprised to learn how often we can find a suitable mortgage deal for first-time buyers with poor credit ratings. Our access to the entirety of the mortgage market means that we can often find suitable deals with lenders who are prepared to look at an individual’s prospects rather than an automated “computer says no” approach.

If you’ve ever defaulted on a payment, received a county court judgement, or faced bankruptcy, you may feel that it’s impossible to get a mortgage deal. But at Mortgagemove, we believe nothing is impossible, and we would strongly suggest that you contact us via our mortgage helpline on 0333 005 0333. In just fifteen minutes, we can have a strong insight into your financial history and help you understand what you need to do to step onto the property ladder in the future. We treat every single client as an individual. As such, we can take your personal history into account and hopefully match you with a lender who can overlook any previous bad credit rating.

Is it possible to get a mortgage with a bad credit rating?

There’s little doubt that it is much harder to get a great mortgage deal if you have a bad credit history. But that’s not to say that it’s impossible. You may have to compromise on the interest rate or the terms and conditions, but bad credit mortgages are available to help people buy their own homes.

As part of your mortgage application, each lender will conduct a thorough check of your financial history. They will want to know your income, your outgoings, and details of your lifestyle. This is so they can make an informed decision as to whether you can cope with the mortgage repayments. In our experience, some lenders are harder to please than others. We often find that smaller lenders or building societies may be more flexible because they work with trained mortgage underwriters rather than automated algorithms. However, they may rely on higher fees or interest rates and require higher deposits to reduce their level of risk.

How can I get a mortgage with a poor credit score?

If you are worried about your bad credit rating, you can take a few practical steps to improve your eligibility amongst mortgage lenders.

Reconsider your timings.

You may think that now is the right time to buy your first home, but if your poor credit is relatively recent, you will find it harder to find a suitable mortgage deal. Lenders will be focused more on your recent past, so the longer you leave it between your previous bad experience and trying to get a mortgage, the better. After several years, the lender will be less interested in your previous issue as they will be focusing more on your current position than your history.

As a bonus, the longer time scale will give you more time to save up for a higher deposit.

Buying with a partner could bring in their credit score.

Perhaps you have a good credit score, but you are considering buying a property with a partner who has a poor track record. You need to remember that mortgage lenders will check the credit references of both parties. Therefore, your eligibility could be impacted by making a joint application. You may wish to make an application solely in your name, but this could impact your affordability and deposit requirements as your mortgage would be based upon one income rather than two.

If this scenario sounds familiar, why not speak to one of our trained mortgage advisors? We can look at the different options available for both joint and single applications and explain each option’s financial implications and affordability.

Always be honest about your past credit scores

When applying for a mortgage, it’s important to be honest with potential lenders about what caused you to have a poor credit rating. Perhaps it’s a lingering effect from when you were a young student. Or maybe you faced a difficult life event that led to financial implications. Mortgage lenders will be more willing to lend to individuals who can explain why they had financial struggles and show that they’ve taken responsible steps to overcome them.

Bad credit mortgages are available to those who have shown that they’ve made mistakes and learned from them. Whether you are a first-time buyer or a home mover, if you are applying for a bad credit mortgage, you may need to be prepared to answer a lot of tricky questions. This is because the lender will be undertaking extensive due diligence to ensure that you are an attractive proposition. Therefore, the more information and detail you can provide, the easier you will find the process.

Consider compromising on your house purchase

One of the easiest ways to get accepted for a bad credit mortgage is to compromise on the house that you wish to buy. If you can reduce the loan to value ratio by providing a higher deposit or considering a cheaper property, you will be deemed a lower risk by the lender.

If you are a first-time buyer, it may be more advantageous to buy a smaller, cheaper property to move in a year or two so that you can show that you have a positive mortgage repayment track record. You can then use the initial fixed term duration to improve your credit score, giving you access to better deals later down the line. If this sounds complicated, please talk to a member of our mortgage team. At Mortgagemove, we believe in helping our clients understand the long-term implications of their mortgage deals. Therefore, we can explain why bad credit mortgages may be more aligned with one- or two-year short-term fixed deals rather than longer deals and why this could work in your favour.

Mortgagemove can help you to find a mortgage lender

We are incredibly proud of our track record in helping our clients take their first steps onto the property ladder. You may be a first-time buyer, or you could be looking for a retirement mortgage. Whether you have a bad credit history or looking to remortgage to a better deal, we promise to treat all of our clients with the same care and attention.

At Mortgagemove, we have access to the entirety of the mortgage market. And as independent advisors, we can offer impartial advice and recommendations based on lenders that we feel suit your individual needs. We’ve built strong relationships with high street lenders and smaller, niche mortgage providers. This means that we have the confidence that we can find you a suitable bad credit mortgage regardless of your previous financial history.

If you are worried about your poor credit score, please phone our mortgage helpline on 0333 005 0333. We can discuss your credit history, discover your current affordability, and identify which mortgage lenders may be suited to you.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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