Can I get a mortgage with adverse credit?
Getting a mortgage with adverse credit is possible, depending on when and how many adverse credit events you have had will dictate what lenders would be willing to consider your application. Adverse credit is used to describe a borrower who has a history of unsatisfactory credit events. Adverse credit events occur if you miss a payment or a payment is late. These may be for mortgages, bank loans, credit card, store cards, basically any kind of credit that you are meant to pay back on a specific date each month. Once you miss a payment or pay a lender late, they will notify the credit referencing agencies, this is then stored on your credit file as an adverse credit event. The fewer of these adverse credit events you have on your credit file the better when it comes to getting a mortgage.
High Street Lenders & Adverse Credit
A lot of our clients come to us after they have already been declined by one of the main high street lenders. High street lenders tend to only want the lowest risk customers. Since the credit crunch and change in legislation banks have a responsibility to ensure they are only lending to customers that can afford mortgages. This has caused them to really tighten up their lending criteria. This combined with the fact there are more and more mortgage applications being made each year has meant that high street lenders are becoming more picky with who they lend to. Some lenders may approve applications that have had one adverse credit event in the last 6 years other may reject any application that has any adverse credit events on their credit file.
Each high street lenders will have different policies when it comes to lending to customers with adverse credit, this is why it is important to speak to an expert that knows the adverse credit market and will be able to put your application to lenders that are more likely to approve it.
Adverse Credit Mortgage Lenders
Some high street lenders will lend to customers that have adverse credit in the last 6 years. If it was a late payment or missed payment then this may not be much of an issue with many lenders. If the late/missed payment was in the last 2 years, this will narrow the amount of lenders that will consider your application.
The more adverse credit you have the more risky it is for a lender, this is why most lenders will require a larger deposit and charge higher interest rates.
There are specialist lenders that have specialist products for customers with adverse credit. These lenders are more than willing to consider applications from customers with adverse credit. The growing number of specialist lenders is also helping for the rates they offer to be more competitive which is great news for our clients as they are getting better rates and paying less interest.
Poor credit mortgage
Having adverse credit will mean that your credit score will fall into the fair or poor range. Getting a poor credit mortgage is trickier but certainly not impossible. It will just need expert advice and in depths look at your circumstances before any applications are made.
To get an idea of your circumstances it is advisable to access your credit report, this will allow you to see the whole picture and be better informed when speaking to lenders. Since there are different credit referencing agencies then the information that they hold on you will be different. You may have a poor credit score with one and a good credit score with another. This is due to the fact banks and lenders are only required to inform two credit referencing agencies. This means that an adverse credit event on your Experian credit report many not show on your Equifax credit report. This can be why some applications get declined due to the customer or their broker not looking at all 3 of the main credit reports. Looking at all 3 will give you and your broker the full picture and will allow them to find lenders who are more likely to accept your application.
Adverse credit mortgage brokers
If you are looking to get a mortgage and have had adverse credit then it can be a good idea to use a specialist adverse credit mortgage broker. Depending on when you’re adverse credit was will dictate the amount of lenders that are willing to consider your applications. You can apply direct but using a specialist broker with the knowledge of all the lenders policies will massively improve your chances. If you apply and get rejected then this will show negatively on your credit report and other lenders will see that you have already been turned down by another lender.
The main benefit of using a broker is their extensive knowledge and relationships with specialist banks. Your broker will be able to go through your circumstances and credit reports and let you know your options without you just trying and seeing with a high street bank.
We can help
At Get Me My Mortgage we have an extensive network of bad credit mortgage brokers who have the expertise and knowledge to help you get the mortgage that you need. They will ensure that everything is explained and will work hard to place your application with the best lenders. They will not only strive to get you a mortgage but also the best rate possible for your circumstances. Call us today on 0161 209 6700 or fill in one of our enquiry forms.