Can you Get a Mortgage if you Have Bad Credit?
If you have bad credit, then you may find it hard to get a mortgage. It’s not impossible for you to get a good deal, but you may find that your options are somewhat limited. Every lender will carry out a credit check when you apply for a mortgage, and if you have some black marks against your name, then your lender may see you as a risk. Some marks will carry far more weight than others, depending on the money involved, and how long ago it was. Some high-street lenders will refuse you outright if you have bad credit, regardless of your explanation.
Finding a Lender who Accepts Bad Credit Ratings
It is more than possible for you to find a lender who would be willing to give you a good mortgage, even if you have bad credit. People fall into bad credit situations for a number of reasons, whether they have had a difficult life event, or if they have gone through a divorce. Sometimes it is a death in the family that sets them on a rough financial road. Either way, it’s important to know that there are some lenders who are more than willing to be flexible when assessing your situation. These lenders however, may want to charge you more interest on your repayments and they may also want a bigger deposit in return.
Steps you Can Take to Improve your Chances
If you know that you have a bad credit history, then there are steps you can take to turn things around. You can give it some time, hoping that the credit damage proves to be less serious over time. This is especially the case if you know that your financial situation has improved drastically over time. You can also consider applying for a mortgage with your partner. Buying with a partner may mean that their credit history is also taken into account, lessening the risk.
Repairing your credit history is also a very good step for you to take. If you can establish a record for making consistent payments and if you can show that you are responsible, then this will work in your favour. Some people try and hide their bad credit, but this is a major mistake. Lenders will always be able to see your bad credit by doing a search. The best thing that you can do here is have an explanation ready that shows why you got into bad credit to begin with, and what you have done to turn things around since then.
Having a steady income will really help you if you have bad credit, along with having a deposit of at least 15%. If you need some help, contacting a mortgage advisor is the best thing that you can do. They can connect you with a lender who accepts bad credit so you can assess your options, while also ensuring that you do not have to pay an extortionately high interest rate.
As part of the Mortgage application process, it is recommended that you obtain a credit report on yourself and your partner, to see what lenders will see and it helps a Mortgage Broker place your case with the right lender.
For more information on your credit report, please click on this link – https://www.smithsfinancial.co.uk/credit-report/
Source- Uswitch – 3rd December 2021