4 Tips for Getting A Mortgage With Bad Credit

A lot of potential buyers think that having a bad credit history means they cannot get a mortgage at all.  That’s not the case and we have helped a lot of people purchase their first home even when their credit history has not been the best.

Here are our 4 tips on getting a mortgage with bad credit:

1: Limit your searches.

Avoid making many mortgage applications in a short period of time. This may have an adverse effect on your credit score. Speak to one of our mortgage advisers for the best way to explore the market. Try to limit your searches to certainties, do as much research as possible beforehand.

2: Get credit files.

Your first port of call to begin your search for the best mortgage for you is to learn as much about your current credit score as possible. Websites such as Experian.co.uk and Clearscore.com will help you find out your score and offer tips to improve it; even a few extra points in your score could help the rates in future mortgage applications.

There are some things you can do that could improve your credit rating and possibly increase your chances of being approved for a bad credit mortgage.

• Make sure you’re on the electoral roll.
• Pay your bills on time and in full.
• Close any credit accounts you no longer are using.
• Consider applying for a credit builder credit card to improve your credit rating.
• Sustainable borrowing with a guarantor loan can also improve your credit score.

These tips are not guaranteed to improve your score and it often takes some time for your score to recover.

3: Know the rates.

Researching many mortgages will give you a picture of the rates available for your credit rating. If you do have a low score you may be asked to provide a deposit of upwards of 15%.

Explore amounts you may be able to borrow. Your mortgage advisor will be able to calculate the amount you’re likely to be offered given your income and other factors such as

4: Get help from family.      

Most lenders will accept a deposit if it’s ‘gifted’ from a family member. This can’t be a loan, and you must be under no obligation to repay the money.

The person gifting you the money will have to sign a form stating the conditions under which they’re lending you the money – for example, whether they expect to live in the house in the future, or whether they expect to own a share of the house.

If you’re unable to get a mortgage because of bad credit, a family member may be willing to be named as a guarantor. Getting a guarantor is a big step, as you and your guarantor will be tied to each other financially. This could have an impact on both your credit ratings.

We understand that every person’s circumstance is different and have other factors that may not be listed above.  Get in touch with us if you want and need a more personalised advise about getting a mortgage when you may have adverse or bad credit.

Contact us at 0333 666 666 3 or fill out our Contact Form and we’ll get in touch with you as soon as possible.