Mortgages for bad credit
History of bad credit and struggling to get a mortgage, or a poor credit score and worried about your chances of being approved? Getting a mortgage with bad credit is possible and we can help!
When you apply for a mortgage, lenders look at a range of different criteria including your credit report. If you have a bad credit score, it is very unlikely that you will be able to get a mortgage from a high street bank, as you are considered a risk. Luckily, we specialise in finding customers the right mortgage at the best price, no matter their credit score.
We work with a number of bad credit mortgage lenders who unlike the high street banks, will assess your application on an individual basis, in order to determine your mortgage affordability.
Our bad credit mortgage specialists can help advise you on all your available options, and find the best possible mortgage deal available to you, to help make your dreams of becoming a homeowner a reality!
County Court Judgements (CCJs)
Getting a mortgage with CCJs is possible. However, your chances of being accepted and the amount you’ll be able to borrow are dependent on; whether the CCJs are still outstanding, if you have had any other credit issues and how much deposit you have, which we can help advise you on.
There are a number of mortgage lenders who will consider your application with past or current defaults. If you have had no other credit problems, your chances of getting approved by a high street mortgage lender also vastly increase, so long as you meet the lender’s own individual criteria.
Late and missed payments
When you apply for a mortgage, lenders will check your credit report to see how you have managed your money. If you have a history of making late and/or missing payments, lenders will presume that you will also not pay your mortgage on time, and therefore be unwilling to accept your application.
Fortunately, we work with a number of specialist bad credit mortgage lenders who will consider your application. They might charge you a higher rate of interest and/or require a larger deposit. But, we can help ensure that you get the best deal available to you.
Taking out a payday loan can significantly reduce your chances of getting a mortgage. If you have had a payday loan within the past 12 months, mortgage providers will not be prepared to lend to you as they are associated with financial instability. If you took a payday loan out a few years ago, the options you have to get a mortgage will also be restricted. But, we can help you to maximise your chances of being accepted.
Debt management plans
If you are currently on or have previously had a debt management plan, you’re chances of getting a mortgage from a high street lender will be affected. However, there are a number of specialist mortgage lenders who will happily consider your application.
They will look at your; income, expenditure and the extent of your credit issues, in order to determine whether they will lend to you, and we can help you improve your chances by submitting your application to the right lenders.
Individual Voluntary Arrangement (IVA)
The majority of lenders will not lend to any individuals with an IVA. However, we have access to a number of bad credit mortgage lenders who will be willing to assess your application. You may have to pay a higher rate of interest and/or need a larger deposit. But, we can advise you on all your available options to ensure that you get the best deal possible.
If your home has been repossessed within the past year, you will unfortunately struggle to get a mortgage. However, your chances of being accepted after this time do improve. If you apply for a mortgage in the initial few years following the repossession, you will probably need a fairly large deposit in order to be accepted. But, the longer you leave it, the better your rate and borrowing power will be.
If you have been made bankrupt in the past 6 years, there are mortgage options available and we can help! The rate of interest you pay may be slightly higher to begin with. But, if you keep up your repayments, your credit rating should improve and enable you to move to a more competitive mortgage deal after a few years.
Bridging finance provides a speedy, short-term solution for individuals looking to quickly complete the purchase of a property. Bridging loans are unsurprisingly popular with landlords and property developers looking to either fund a property investment, buy to let or development. But, they are also becoming increasing popular with homebuyers wanting to unblock property chains and secure their dream homes.
What are the advantages to bridging loans?
There are a number of potential benefits to using bridging finance for your short-term finance needs including:
- No credit checks
- Quick turnaround time (often arranged within 24 hours)
- Daily interest rate
- No early repayment charges (on some schemes)
Lenders will however require:
- A completed application form
- Proof of address and identification
- A copy of your buildings insurance policy schedule – We can of course arrange all of this for you!
Is there an alternative to bridging finance?
If you decide that a bridging loan isn’t the right choice for you, then there are other alternatives:
- High LTV Mortgage: A High loan to Value Mortgage with no early redemption charges, should enable you to make a large repayment without incurring a penalty.
- Let to Buy Mortgage: If you have found your dream home but can’t wait to sell your current property, or are struggling to get the price you want for it, a Let to Buy Mortgage will allow you to buy your new home, whilst you’re waiting to sell your existing one.
Where can I get a bridging loan?
If you are considering a bridging loan, make sure you have a clear repayment strategy in place first, which might include; getting a residential or buy to let mortgage or selling the property altogether.
As expert mortgage brokers we can help advise you whether a bridging loan is the right solution for your individual needs and circumstances, or if an alternative finance option would be more suitable.
Some of these products are not regulated by the Financial Conduct Authority
Mortgages for teachers
When newly qualified, part time or supply teachers, apply for a mortgage through their local banks or building societies, they are often overlooked, due to the lenders’ strict lending criteria and lack of consideration for the individual’s personal circumstances. Proving a regular income on a fixed or part-time contract can be difficult, which can automatically make you unattractive to many high street lenders. But, your chances of getting a mortgage are just as good as anyone’s and here’s how.
Use all your income
As a teacher you may undertake additional paid work such as tutoring in the evening or test marking in the school holidays, which can all be used to support your application.
Let your partner take the lead
If you plan to apply for a joint mortgage and your partner works full time, consider adding them as the first name on your mortgage application. It could improve the chances of getting your application approved, as lenders will favour them for their regular income.
Consider government initiatives
If you are struggling to raise a large deposit, there are a number of government initiatives available which could help to get you on the property ladder:
Shared Ownership: Part of the Help to Buy scheme and enables you to buy a share (between 25% and 75%) of a new or existing property.
Equity Loan: The government lends up to 20% towards the purchase cost, meaning you only need a 5% cash deposit and a 75% mortgage to buy your home. If you are looking to buy a property in London, the percentage the government will lend you increases to 40%. However, the property must cost no more than £600,000.
History of bad credit?
If you have had credit issues including; arrears, defaults, County Court Judgements (CCJs), debt management plans or been made bankrupt in the past 6 years, there are still lenders who will consider your application. Our advisors regularly work with adverse mortgage lenders and are well placed to advise you on all your available options.
Get expert advice
Our mortgage advisors are experts in teacher mortgages and can help advise you on how much you can afford to borrow and source the best teacher mortgage deals to suit your individual needs, in order to maximise your chances of being approved first time. They will also complete all the relevant paperwork, and liaise with your lender, estate agent and solicitors to ensure that your application is a success!
Why you should NEVER take out a payday loan
Are you considering taking out a payday loan? Take our advice and consider all the available options first. Payday loans may seem like a quick fix to a short term problem. But, they can seriously jeopardise your credit score, and risk your chances of being approved for future credit, especially a mortgage!
6 years bad luck?
Payday loans can significantly reduce your ability to get a mortgage, even if paid on time. Lenders use your credit report to check your repayment history, which contains records on bank accounts, credit cards, loans, overdrafts, mortgages, mobile phone/s and some utilities payments, from the past 6 years!
Payday loans are associated with financial instability, so if you are looking to buy a property and have had a payday loan within the past 12 months, you will not be able to get a mortgage. Similarly, if you had a payday loan a few years ago and only have a small deposit, your chances of getting a mortgage are restricted and will likely be at a far less favourable rate!
Alternatives to payday loans
If you need some extra cash, there are other options which can be far cheaper – so long as you can afford the repayments!
Most banks offer a 0% interest overdraft with their current accounts, allowing you to gain access to a reserve amount of cash. You can spend on your card and make withdrawals from a cashpoint, up to the limit the bank agrees with you.
Interest rates are at an all-time low, so it’s a good time to get a loan. However, you should only ever borrow what you need and repay it as quickly as possible – you won’t want to pay any more interest than is needed!
A credit card will enable you to spend on your card up to the agreed limit. This is fine, so long as you can afford to repay what you have borrowed at the end of each month, to avoid having to pay any interest.
Many credit cards now also offer 0% interest for 12 months+ on balance transfers, giving you plenty of time to repay the money you borrow! This could be a great option if you have a good credit score and are able to make the repayments. Bad credit? There are still options available, but the time you have to make the repayments may be shorter. However, you will likely have much longer than you would with a payday loan!
Watch out! Make sure you know how long the interest-free period is for and don’t go over the agreed limit – you won’t want to be hit with any additional charges. Remember to also never withdraw any sum of cash on your card, as you will pay a fee for this which could be hefty!
Credit unions and CDFIs
Credit unions and Community Development Finance Institutions (CDFI) aim to assist people who may not be able to get standard financial products and services available on the market. They offer loans that are similar to payday lenders with generally cheaper interest rates.
If you are interested in obtaining a copy of your credit report, you can do so by signing up with either Experian, Noddle or Equifax.