What is bad credit?
Bad Credit or adverse credit, comes in all shapes and sizes, from missed loan or credit card payments to bankruptcy.
Usually, when a lender deems someone as having bad credit, it’s because they have a poor, or low, credit rating, either because they have no credit history, or because their credit report displays issues like late payments, defaults, CCJs, bankruptcy or debt relief orders.
Can I get a mortgage with bad credit?
Yes, although bad credit can make some lenders feel hesitant about loaning large amounts if, at all to you, some niche lenders have criteria that are more open and accepting of applicants with poor credit or a low credit score.
We help first-time buyers, next-time buyers, remortgagers, business owners and buy-to-let landlords weigh up the pros and cons of the options that we find for them so that when it comes to applying for a mortgage with bad credit, they feel confident that the lender they choose is going to approve them.
What is a bad credit mortgage?
There isn’t necessarily a product called a bad credit mortgage but there are lenders more equipped and used to lending to people with poor or low credit history.
Debt is more common than you might think and while having bad credit isn’t great if you’re hoping to get a mortgage, it’s not the be-all and end-all. Lots of lenders have mortgage criteria that allow for a less than perfect credit history or debt if it’s affordable in relation to your income.
How are they different from other mortgages?
These types of mortgage agreements carry more risk to the lender who could lose money if you were to become unable to repay your mortgage. That’s why the lenders that accept bad credit can charge higher levels of interest. That can make your mortgage more expensive overall, which might not be ideal.
Some people who take out mortgages with a higher interest rate do so with the aim of switching to a cheaper deal in the future with a remortgage, once their credit score and report has improved.
Your home may be repossessed if you do not keep up repayments on your mortgage.