Having bad credit may not be a bigger issue than it seems, especially when it comes to getting a mortgage. It is just vital that you approach the right lenders showing the right level of flexibility within their criteria for your situation.
What are mortgages for bad credit?
As the title suggests, a mortgage for bad credit is an option for those who want to buy or remortgage a house but are restricted by their credit score. Compared to regular mortgages, these mortgages attract can attract a higher interest rate or require a bigger deposit because of the perceived higher risk attached.
As a result, mortgages with bad credit can sometimes take more time to get approved by the lender but not always. Being prepared to make an application is an important exercise in getting yourself ready for the process ahead.
Can I buy a house with a bad credit mortgage?
If you're looking to buy a house with bad credit, the good news is that there are several mortgage brokers in the UK able to help you get a bad credit mortgage. With access to lenders that can show flexibility, your chances of speaking to the right lender early in the process is increased.
The lenders will require proof of your income, investments, savings, and outgoings to ensure that you are a responsible mortgage borrower.
Remember, many lenders are more interested in your ability to repay in the future rather than any problems you have had in the past.
Does your credit score matter for getting a mortgage?
Although credit scores do matter, exceptions are possible if you can prove that your monthly repayments will pay off the mortgage debt. Meeting their affordability calculation is as important to them as what has impacted your credit score in the past.
Each lender has its own scoring system when deciding if they will lend. This alongside their lending criteria will determine if they grant you the loan.
Can you get mortgages with bad credit?
If you're wondering whether getting a mortgage with bad credit is possible or not, the straight answer is yes. With the right lender and some homework on each lender's criteria, you will be in a better position to know what is required.
Using a mortgage broker such as Meridian Mortgage Solutions to research on your behalf, will also open up lenders that you cannot access directly or who offer exclusive rates and criteria.
How can I pre-qualify for a mortgage for bad credit?
The best way to get a mortgage with bad credit is by hunting for a mortgage lender who offers different mortgages for bad credit. Criteria can differ massively between lenders and matching your own situation to these lenders, is what a good mortgage broker will do on your behalf.
By discussing your situation with yourself, and the lender, obtaining a positive decision in principle before you make an offer on a property, will save you time later and avoid situations where the transaction can not complete because you are unable to obtain a mortgage.
Conclusion
It is possible for you to get qualified for a mortgage for bad credit with a lender who will offer you flexibility with your credit score. Many borrowers have given up looking when they are initially rejected but remember this can often be down to the wrong lenders being approached.
When it comes to speaking to a lender it comes in two parts. What score is the lender attaching to your situation and are you meeting their lending criteria?
A credit score that is perceived to a ‘poor’ or ‘bad’ is only sometimes in the eyes of the credit reference agency where you have obtained your report from. The lender may have a completely different view of this.