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We could help you get a mortgage with bad credit

A bad credit history can be seen as a barrier when trying to get a mortgage. We are adverse broker of the year 2023.

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Bad credit mortgage

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.

We have access to over 30 bad credit lenders

  • Even with a registered CCJ, Default, Missed Payment, DMP, IVA or Bankruptcy.
  • Many lenders will still loan to people with bad / poor credit
  • Mortgage, remortgage
  • Can also be considered for Help-to-Buy, Right-to-Buy and Shared Ownership

What is a bad credit mortgage?

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.

See if you would be eligible to apply for a mortgage

The pre-qualify form will not affect your credit rating. It will give us a quick indication of your circumstances only.

Alternatively, arrange a callback on the form below.

Mortgage application process

4 simple steps for applying for a mortgage. See more about the mortgage application process here

Complete our
pre-qualify form

Let us know a few details about the mortgage you require

A mortgage specialist will call

One of our brokers will call and get a few more details of your requirements

We search for your perfect mortgage

We will search the market for the best rates for your circumstances

A Decision in Principle is made

We will secure a DIP with a lender, if you approve we move forward with a full application.

Whatever your mortgage goal, there will be something for you​

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We're on a mission to save you money on your mortgage

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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.

What should I do next?

There are many ways to contact us

Enquire online – our simple online form takes just a few minutes.

Give us a Call – our qualified advisers will assess what you are looking and do all the hard work for you searching the market – 0330 232 0285.

Ask for a callback – havent got time now? Ask us to call you back and a time / day convenient to yourself. Call me back.

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Bad credit mortgage FAQ

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.

  • Give it time: blemishes on your record could be seen as less serious over time, especially if your financial situation has improved. Everyone can, in time, get a better credit score.
  • Consider your partner’s debt: buying with a partner will mean their credit history gets taken into account as well as yours
  • Be honest: mortgage lenders will conduct thorough searches, and trying to hide credit mistakes from the past will look bad.
  • Have an explanation for any misdemeanors in the past: lenders will be interested in why you got into financial trouble and what has happened since then.

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:

1. What’s listed on your credit report

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:

  • You still have lots of options, even if you have bad credit: There are lots of bad credit mortgages out there.
  • You could be in your own home sooner than you think: You could start your journey to homeownership sooner if you take out a bad credit mortgage – sometimes buying and moving into your own home can take as little as 6 weeks.
  • Getting on the property ladder can make you much more appealing to all lenders in the future – whether for a different mortgage, or another type of loan.

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:

  1. Pay off debts: If you have outstanding debts, try to pay them off or reduce them as much as possible before applying for a mortgage. This can improve your credit score and demonstrate to lenders that you are responsible with your finances.
  2. Save for a larger deposit: A larger deposit can help offset the risk associated with a lower credit score. Lenders may be more willing to approve your application if you can provide a larger deposit.
  3. Use a mortgage broker: Different lenders have different requirements and criteria for approving mortgage applications. A mortgage broker will know the lenders that are likely to accept your application and can compare rates and terms from multiple lenders to find the best deal for your situation.

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.

  1. Interest rates: Lenders will consider the credit scores of both applicants when assessing the risk associated with the loan. If one applicant has bad credit, it could lead to a higher interest rate for the mortgage, even if the other applicant has great credit.
  2. Approval odds: While one applicant may have great credit, lenders will still consider the credit score of the other applicant. If the applicant with bad credit has a very low score, it could impact the approval odds for a successful joint mortgage application.
  3. Limited mortgage options: If one person has bad credit, it may limit the mortgage options available to you. Some lenders may not be willing to work with borrowers who have poor credit.
  4. Deposits: If one applicant has bad credit, the lender may require a larger deposit to offset the risk associated with the loan.
  5. Responsibility for the mortgage payments: If the joint mortgage is approved, both applicants will be responsible for repaying the debt. If one applicant defaults on the mortgage, it could impact the credit score of the other applicant and lead to financial strain.  You would create a joint financial association and responsibility to pay the mortgage.

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.

  1. Interest rates: Lenders will consider the credit scores of both applicants when assessing the risk associated with the loan. If one applicant has bad credit, it could lead to a higher interest rate for the mortgage, even if the other applicant has great credit.
  2. Approval odds: While one applicant may have great credit, lenders will still consider the credit score of the other applicant. If the applicant with bad credit has a very low score, it could impact the approval odds for a successful joint mortgage application.
  3. Limited mortgage options: If one person has bad credit, it may limit the mortgage options available to you. Some lenders may not be willing to work with borrowers who have poor credit.
  4. Deposits: If one applicant has bad credit, the lender may require a larger deposit to offset the risk associated with the loan.
  5. Responsibility for the mortgage payments: If the joint mortgage is approved, both applicants will be responsible for repaying the debt. If one applicant defaults on the mortgage, it could impact the credit score of the other applicant and lead to financial strain.  You would create a joint financial association and responsibility to pay the mortgage.

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:

Myth ONE

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.

Myth TWO

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.

Myth THREE

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.

Myth FOUR

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.

  • No credit history
  • Low credit score
  • Late or missed payments
  • CCJ
  • IVA
  • DMP (Debt management plan)
  • Payday Loans
  • Bankruptcy

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:

  • Paying your bills on time and staying out of your overdraft
  • 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. 

Watch our video on bad credit mortgages

Below are some of the lenders we work with

Getting a bad credit mortgage

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.

Case Study

We saved Mr H and Mrs H, almost £500 per month.

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

BalancePaymentRate
Previous Mortgage£61,000£4901.25%
Previous Secured Loan£43,000£43610%
Previous Unsecured debts £44,320£657
New Mortgage£150,000£1097.672.10%

Complete the form below and one of our specialist mortgage advisors will call you back at your arranged time.
Or call us now on 0330 232 0285

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