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A bad credit history can be seen as a barrier when trying to get a mortgage. Clever Mortgages don’t see it this way and specialise in helping those with bad credit secure a mortgage whether you are looking at buying a house or remortgaging.
We’ve helped 1000s of customers with bad credit to get a mortgage, see if we could help you.
There’s no such thing as a bad credit mortgage. This is a common misconception – you’ll still be able to get a standard mortgage, but they’ll most likely have higher interest rates or extra charges, hence the term ‘bad credit mortgage’. They’re also known as ‘adverse credit mortgages’ or ‘subprime mortgages’.
There’s so much jargon when it comes to finding a mortgage, that it can be overwhelming to make sense of it all. A bad credit mortgage – also known as sub prime mortgages or adverse credit mortgages – are specifically for people who’ve got a bad credit rating. Finding a mortgage suitable for you, when you’ve got bad credit, may not be easy, but obtaining a mortgage, even with an extremely low credit score and defaults, is still possible.
You might have a few missed payments, had a CCJ (County Court Judgment) or may have been made bankrupt. You might also be in, or have been in, a DMP (Debt Management Plan). These can all result in a bad credit score, limiting your finance options.
The good news is that after a few years of paying back a bad credit mortgage your credit rating will have repaired itself to some degree due to your payments towards it (as long as they’re on time!). This means that you could move onto a better mortgage that has a lower interest rate in a few years, so don’t worry about being stuck on a bad credit mortgage forever.
4 simple steps for applying for a mortgage. See more about the mortgage application process here
Let us know a few details about the mortgage you require
One of our brokers will call and get a few more details of your requirements
We will search the market for the best rates for your circumstances
We will secure a DIP with a lender, if you approve we move forward with a full application.
We specialise in helping people find a mortgage and remortgage.
We require your details only once and we’ll know the best lenders for your circumstance and give you the best rates.
There are many ways to contact us
Enquire online – our simple online form takes just a few minutes.
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Yes, you can et a mortgage with bad credit. But your options will be more limited to someone with good credit and will dependent of your circumstances. For instance, why you’ve got bad credit.
If you have a poor credit history, there are a number of steps you can take to improve your chances of getting a mortgage. You might have heard that if you’ve had an IVA or have a CCJ it’s impossible to get on the property ladder, but that’s not always the case.
Using a mortgage broker who understands the market will increase your changes of getting a mortgage
Bad Credit mortgages work well for people who are trying to get on the property ladder, but may have been refused a mortgage elsewhere because of their bad credit history. They are also suitable for homeowners or home movers whose financial situation has changed since taking out their previous mortgage.
These mortgages work in exactly the same way as a standard mortgage. The amount you borrow you will pay back to your lender in monthly instalments with interest added.
We can help and advise around how to get a mortgage with bad credit, even if you’ve got a CCJ, or have had an IVA, we might still be able to find the right deal for you.
Speak to an advisor if you have any questions.
There are a number of lenders that offer mortgages to borrowers with bad credit. These lenders are often referred to as “subprime lenders” or “high-risk lenders.”
Subprime lenders offer mortgages, but these can sometimes come with higher interest rates, larger deposits and fees than traditional lenders. This is because they are taking on more risk by lending to borrowers with bad credit.
However, subprime lenders can be a good option for borrowers who have been turned down by traditional lenders. If you are struggling to get approved for a mortgage, it is worth talking to a subprime lender to see if you qualify for one of their products.
Speak with the bad credit broker specialists at Clever Mortgages, we have access to over 30 bad credit mortgage lenders who will look at the persons situation, not the past.
One of the main differences with a bad credit mortgage, is that interest rates tend to be higher when compared to standard mortgages. You’re likely to have to put down a larger deposit too (between 15-30% of the total property value is typical), because bad credit customers are considered higher risk by lenders. If you are looking to remortgage you may already have more the 15% equity (the difference between your property value and the amount you owe on a mortgage).
However, paying a mortgage consistently for a few years can improve your credit score. So in time, you might be able to remortgage with a standard lender at some point in the future.
Many people don’t know what their credit score is or how it works, but it’s actually the most important information about you when applying for any type of finance, mortgage or any bad credit mortgages. There are plenty of credit score myths out there:
However, there are some factors that can affect your credit score, including:
There’s no single, universal credit rating or score that a lender will use when assessing your application. The scores you may have seen advertised by credit reference agencies are simply indicators of your credit worthiness, based on the information contained in your credit report. Each lender has its own system for deciding whether or not to lend to you – meaning you could be rejected by one, but accepted by another.
The first step to improving your credit (and your chances!) is to know exactly what your situation is, so try getting in the habit of regularly checking your credit score. Checking your credit score is free through a credit reference agency including Experian, Equifax or TransUnion.
Try a free credit report here
The simple answer is, there isn’t a minimum credit score to get a mortgage, in fact some lenders don’t credit score at all.
We find when customers are talking about a credit score this often relates to the score given by credit reference agencies such as Experian, Equifax, or TransUnion. In fact, lenders have their own way of assessing you for a mortgage application, this is based on their own scoring. The score given by a credit reference agency is an indication of the likelihood of you being accepted across a range of lenders. So, whilst a ‘credit score’ is useful and gives a guide to acceptance, it’s not always that straight forward.
Don’t worry though, a mortgage adviser can help you to better understand this and find the right lender for your circumstances.
A mortgage lender will assess your eligibility for a mortgage based on a number of factors, some of these being your credit history, deposit amount, income, outgoings, employment status, and other financial circumstances.
Lenders will look at your credit report to find key information on your credit history, including any missed payments, outstanding debts, and other financial obligations. Lenders will use this information to determine the level of risk associated with lending to you.
To improve your chances of getting approved for a mortgage in the UK, it’s advisable to manage your debts responsibly, make payments on time and at the right amount, demonstrate a stable income, review your outgoings to ensure you aren’t paying too much out.
You can always seek advice from a mortgage adviser who can help you navigate the mortgage application process and find lenders that are more likely to work with your specific financial situation.
Clever Mortgages know different lenders criteria, so once we have an assessment of your situation, we know which lender to approach to best fit you.
Yes. You’ll still be able to get a mortgage with bad credit, but at the same time you’ll have to accept the fact that not every lender is going to be itching to give you one. Some high street banks might be averse to lending to you, but if you scout around enough then you’ll be able to find a lender who’ll look past your credit score and
Be careful when you actually apply for a mortgage too – if you’re rejected when applying for a mortgage this will only further negatively affect your credit rating, making it less likely you’ll be accepted for a so-called bad credit mortgage.
Using a mortgage broker who understands the market will increase your changes of getting a mortgage
You may consider whether now’s the time for you to buy, or if you should wait until you’ve improved your credit rating. 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, to increase your chances of getting accepted for a standard mortgage. But, you might be surprised to know that:
Getting a joint mortgage with a partner has bad credit can be more challenging, but it is still possible. When you apply for a joint mortgage, lenders will consider both your credit scores and credit histories, as well as your income and expenses.
If one person has bad credit, it could impact the overall application and lead to higher interest rates or stricter terms. However, there are steps you can take to improve your chances of getting approved for a joint mortgage, including:
It’s important to note that even if you are approved for a joint mortgage with bad credit, you may still face higher interest rates, compare to a ‘clean credit’ application. It’s important to carefully consider whether you can afford the monthly payments before committing to a mortgage.
Read more on getting a joint mortgage where one person has bad credit.
If one applicant has great credit and the other has bad credit, it can affect the joint mortgage application in a few ways:
Overall, if one applicant has great credit and the other has bad credit, it’s important to carefully consider the potential impact on the joint mortgage application. You may want to explore other options, such as applying for the mortgage solely in the name of the applicant with great credit or working to improve the credit score of the applicant with bad credit before applying.
If one partner has bad credit, it can have several potential effects on the other partner, especially if they are applying for a joint mortgage or other type of loan together. Here are a few examples:
Many people don’t know what their credit score is or how it works, but it’s actually the most important information about you when applying for any type of finance, mortgage or any bad credit mortgages. There are plenty of credit score myths out there:
For instance:
The less debt you have the better: actually if a lender can’t see that you’ve paid off debt, they don’t know you’ll be consistent in your repayments to them.
You don’t need to check your credit report for mistakes: check your credit report regularly! Experian found that nearly half of people have never checked theirs. People DO find mistakes, and they’re usually fixable and can make a big difference to how lenders view your application.
There’s a credit blacklist: When you apply for credit you will be assessed on the information a lender has on you already, the details you put in your application and what it needs to confirm through your credit report.
Your credit score is impacted by previous occupants at your address: there is also uncertainty around whether an address effects your application for credit. In fact, an individual’s credit application can only be affected by someone else’s credit history if there is a financial association, such as a joint account with a partner.
When considering your mortgage application, lenders tend to look not just at your credit rating, but also at the details of your credit history. The lender will look at exactly what happened, and the circumstances. A missed utility bill will be judged differently from a County Court Judgement, for example.
Debt Management Plans or IVAs
Under debt management plans, you come to an agreement with your creditor to repay a limited amount of your debt each month. Alternatively, you can seek out an individual voluntary agreement, or IVA, which allows you to make affordable payments towards your debt over the long term, often five to six years.
On your credit file, both IVAs and debt management plans are usually recorded as a series of defaults. Banks tend to look for your debt management plan to have been fully paid out, followed by 12 months of on-time payments, before considering offering a mortgage. In the case of IVAs, you may need to wait substantially longer.
Read more on the types of bad credit, or speak to us for free initial advice.
There’s a common misconception that mortgage companies will never lend to those with a poor credit history.
Having a credit record which is less than perfect may reduce your options, but there are plenty of options for those that have had difficulties in the past.
Clever mortgages have specialist brokers that deal with lots of people from different financial backgrounds. We know the right lenders that are more likely to say yes to your current situation.
Speak with one of our brokers today to see how we could help you.
It’s usually possible to remortgage with bad credit and if your credit rating has gone up since the last time you took out a mortgage, but you’re still in the ‘bad credit’ category, it may be possible to remortgage with a high-street lender. Whether you’re able to secure a better rate will depend on your credit score, your income, your monthly out-goings (including any dependents), your property’s current value and the equity you hold in it.
There are a number of other things you can do to enhance your credit-rating:
Managing your available credit carefully
Closing any inactive accounts
Avoiding applying for credit shortly before submitting your mortgage application
Fix any errors on your credit reports
Remove any links to ex-partners or housemates / properties with poor credit scores.
A bad credit history can be seen as a barrier when trying to get a mortgage. Clever Mortgages don’t see it this way and specialise in helping those with bad credit secure a mortgage whether you are looking at buying a house or remortgaging.
We’ve helped 1000s of customers with bad credit to get a mortgage, see if we could help you.
Mr H had finished an IVA but Mrs H was still in her DMP, they also had 3 other debts and wanted to consolidate all into one mortgage payment. Combining both mortgage and secured loan would overall bring the interest rate down.
We managed to find the couple a low fixed rate of 2.10% which makes a real impact to what was the combined monthly repayments of £1,583 (mortgage £490, secured loan, £436, other debts, £657), lowering them to £1,098 – meaning they are making an impressive saving of £485 a month
| Balance | Payment | Rate | |
|---|---|---|---|
| Previous Mortgage | £61,000 | £490 | 1.25% |
| Previous Secured Loan | £43,000 | £436 | 10% |
| Previous Unsecured debts | £44,320 | £657 | |
| New Mortgage | £150,000 | £1097.67 | 2.10% |
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Clever Mortgages is a trading name of Financial Makeover Limited. Financial Makeover Limited is a limited company registered in England and Wales with registered number 6111701. Registered Office: Kempton House Kempton Way, Dysart Road, Grantham, Lincolnshire, NG31 7LE. Financial Makeover Limited is authorised and regulated by the Financial Conduct Authority with registered number 706595. Your initial consultation and any quotations are free and you are under no obligation to proceed with any options that may be available to you. If you choose to go ahead with a mortgage or secured loan, a fee will become chargeable. Our calls may be recorded and monitored for training, compliance and complaint handling purposes. Please note commercial mortgages and some buy to let mortgages are not FCA regulated products.
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