Bad Credit Mortgage
Lenders, through their decision in principle systems, will determine whether or not they are willing to lend to you. This is based upon factors such as the amount of deposit you have, how much you earn, what you living costs are, whether or not you have children and also by reviewing credit history.
If you have got or have had any incidences of bad credit then a lender may decline to lend to you as they may perceive you as being too higher a risk.
Ultimately each lender has its own criteria.
The majority of high street lenders will only allow some very minor adverse credit to be shown on your credit file and this adverse/bad credit typically needs to be fairly historic with all current credit activity being up to date and all paid on time.
There are though lenders in the current market place that, through their own credit scoring and criteria guidelines, do allow for items of adverse/bad credit.
Typically they will often allow for some, but not all, of the following items to be registered against your credit file :-
- Bankruptcy declared within the last six years
- IVA’s satisfactorily conducted
- If you are in a debt management plan
- If you have a county court judgement registered against you
- If you have any defaulted unsecured credit registered
- You have missed a credit card payment
- Your Experian, Call Credit or Equifax credit scores could be low
- You have missed a mortgage payment
- You have missed a loan payment
- You’ve been unable to keep up with your minimum payments for loans, credit cards, store cards or hire purchase agreement
- You have an excessive/high number of credit accounts such as credit cards, loans and hire purchase agreements.
You credit is linked to your payment history and lenders have instant access to this information when making an assessment of your application. Just a few missed payments to a credit card can make the difference and prevent you from accessing a number of mortgages.
Despite all of this finding a mortgage to buy your first home or move onto another property is achievable, even if you have bad credit registered against you. You will though need to speak to a mortgage broker to determine the products that may be available to you.
You should also not assume that, just because one lender says no to you, that another cannot assist. Using a knowledgeable mortgage broker will minimise the chances of being declined and find a solution to suit your previous or current bad credit quickly and easily.