Things You May Not Know About Bad Credit Mortgages 

Important to know

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

If you have bad credit, don’t lose hope. You might think that applying for Bad Credit Mortgages is a waste of time, but the industry is always changing and evolving, and what didn’t work in the past might now work for you.

Please remember that a mortgage is a loan secured against your home. Your home may be repossessed if you do not maintain repayments on your mortgage or any other load secured against it. You may have to pay an early repayment charge to your existing lender when you remortgage. Think carefully before securing other debts against your home. And it is always a good idea to speak with an experienced mortgage broker who can talk you through the process and understand the options and what they mean for you.  

There are a number of things that can determine if you qualify for a mortgage with bad credit, and you will want to ask yourself the following questions.

1. Do you have current outstanding issues with bad credit? 

Since each mortgage application is assessed differently by the lender, it’s important to view each circumstance as unique. If you have a current and very recent history of missed payments and debts, it can be more difficult to get approved. On the other hand, if the missed payments are for small amounts you may still qualify for a mortgage. And if the missed payments happened long time ago, and your finances have since got back on track, a lender will now see this as a positive and can still consider you. That said, if your current issues stem from one particular event like being laid off from work or going through a divorce then it may still be possible to get approved for mortgage, providing it is affordable. 

 2. When were your credit issues registered? 

If you have had a few defaults and previously been rejected for a mortgage, know that there comes a time when certain bad credit issues fall off your credit report. This could make you eligible for the best mortgage rates again despite having had some negative marks on your credit in the past. However, not all lenders follow this rule. Some lenders refuse to work with anyone who has filed for bankruptcy, regardless of their current situation or how long ago it occurred. Other lenders are more lenient and will consider most applications if the issues are 6 years old or older. And some even consider bad credit mortgage applications for issues that happened as recently as 3 years ago. If you want a better chance at success in securing a bad credit mortgage, use an experienced mortgage broker who understands the industry and market trends. 

3. Is your bad credit still outstanding or settled? 

Mortgage lenders tend to offer you much higher rates if your bad credit has not been settled. If you have any arrears, defaults, or CCJs, it may be in your best interest to settle those debts before applying for a mortgage. Lenders see an active debt as a complication that could affect your monthly repayments. However, some lenders will choose to ignore a bad debt, depending on when it was registered; unless it’s bankruptcy or repossession, in which case they may be more likely to reject the application altogether. If is not possible to settle old bad credit, as you may not have the money to do so, speak to a broker to understand the available options.

4. With a bad credit history, is it possible to qualify for a mortgage?

In a nutshell, yes as you’re not automatically ineligible for a mortgage because you had some issues in the past that may have been out of your control. Nowadays, many lenders will assess you under different standards, so some things are no longer seen as major roadblocks towards getting approved for a mortgage. The key will always continue to be the ability to repay the mortgage, so affordability will play a key role in ensuring that you can qualify. Some other factors that will also help you qualify are things such as having had a job with a steady source of income for a long period of time; not only that but the type of industry and role you have plays an influence too.

Talk to one of our advisors about Bad Credit Mortgage on 02081541111 today or Get Started Online with our easy online form, and start taking action today.

Luca Bertolino

Mortgage Expert

Your Mortgage Experts is led by Luca Bertolino with 20 years experience in financial services and in the property market. Through Luca’s wealth of knowledge and expertise, Your Mortgage Experts have become a trusted adviser that clients have come to rely upon for all their mortgage and protection needs.

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