Are you tired of being turned away by traditional mortgage lenders due to your less-than-perfect credit score? Well, you’re not alone. Many individuals in the UK face the challenge of obtaining a mortgage with bad credit. However, there is hope on the horizon! In this article, we’ll explore the world of specialised mortgage lenders who are willing to cater to those with less-than-ideal credit histories. So, if you’re ready to fulfil your dream of owning a home, buckle up and discover how you can secure a mortgage in the UK despite your bad credit.
What is meant by Credit Score in the UK?
A credit score in the UK is a 3-digit number that helps lenders, banks and other financial institutions assess how likely an individual is to repay their debts. This score ranges from 300 (very poor) to 850 (excellent). A good credit score generally falls between 700 and 800, while anything below 600 is considered bad credit. Please note that this score can change depending on the credit agency. E.g., it could be up to 999 or up to 1000. A good credit score can help you to qualify for different residential and buy-to-let mortgages in the UK.
However, there are also some mortgage lenders that can give you a mortgage with a poor credit history, but you may need to contact a specialist bad credit mortgage broker to help you with the application process.
What are the Problems with having a Bad Credit Score?
Having bad credit can make it difficult for you to obtain a mortgage, as many lenders perceive individuals with lower credit scores as having higher risks. You may find it hard to get approved for a loan or mortgage due to your bad credit score. In addition, if you do get approved, the interest rates may be significantly higher than those offered to others with better credit.
Fortunately, there are still several mortgage lenders who specialise in bad credit mortgages. These lenders take a more holistic approach to assessing an individual’s financial situation and may be more willing to offer a loan or mortgage despite poor credit.
It’s important to note that even if you have been declined for a mortgage due to your bad credit score, you may still be able to secure one with the help of specialist brokers. By looking at other factors, such as your income and employment historyA record of a borrower's employment history, which may be us..., these lenders can assess whether or not they should offer you a loan and what terms they should attach. This can often result in better rates than those offered by traditional lenders.
When applying for a bad credit mortgage, it is essential that you take the time to shop around and compare different lenders to get the best deal.
Which are some major lenders for bad credit mortgages?
Please note that this information is correct as of 25/08/2023 and is subject to change without notice.
There are no specific mortgage lenders for bad credit mortgages; every lender has different criteria for the applicants of bad credit that are also updated regularly. According to the article on Bad Credit Mortgage brokers from Haysto , some of the most popular lenders who offer bad credit mortgages in the UK include:
- Pepper Money: Pepper Money is a consumer finance lender that specialises in bad credit mortgages. They have a range of products for different situations and offer competitive rates.
- Aldermore Bank: Aldermore Bank has a range of mortgage products designed specifically for those with bad credit. They also provide highly personalised advice to ensure you’re getting the best deal.
- Bluestone Mortgages: Bluestone Mortgages is a specialist lender that has been specifically designed to help those who have faced financial difficulty in the past. They offer a range of bad credit mortgage products with competitive rates and helpful advice. Bluestone also has experts on hand to guide you through the process and provide tailored advice on what product would suit your individual situation best.
- Vida Homeloans: Vida Homeloans is another lender that specialises in providing mortgages for those with a bad credit history. They offer competitive rates and are willing to consider all types of applicants, even those who have been turned down elsewhere.
- Darlington Society: Darlington Society is a specialist lender that offers bad credit mortgages to those with poor credit histories. They provide tailored advice and competitive rates, as well as offering advice on how to improve your credit score.
- Kensington Mortgages: Kensington Mortgages is also one of the popular mortgage lenders for adverse credit mortgages. They have a range of products to suit different individual needs and are willing to consider applicants with poor credit histories.
- MBS Lending: MBS lending is also one of the specialist bad credit mortgage lenders in the UK. They offer a range of competitive products and are willing to consider applicants with all types of credit histories.
- Buckingham Building Society: This is also a lender from a village near Chalfont St Giles in Buckinghamshire. They are well-known for their bad credit mortgages and offer competitive rates, as well as providing tailored advice on how to improve your credit score.
- Foundation Home Loans: It is also a specialist mortgage lender that helps those with bad credit histories. They also provide tailored advice on how to improve your credit score and offer competitive rates.
- Kent Reliance: It is a specialist lender that offers bad credit mortgages. They understand the difficulties faced by those with bad credit and offer tailored advice to ensure their customers are getting the best deal. They also have competitive rates for those looking to purchase or remortgageRefinancing an existing mortgage with a new mortgage. with bad credit.
It is important to note that these lenders may not always offer the lowest rates, so it’s best to shop around and compare different lenders in order to get the best deal. It is also worth speaking to independent brokers who can help you find the most suitable mortgage lender for your circumstances.
How to Overcome Bad Credit When Seeking a Mortgage in the UK?
There are many ways to overcome an adverse credit score in the UK when seeking a mortgage. Here are some of the best steps to take:
- Get your credit file report and check it for any inaccuracies. This will help you identify any areas that need improvement and rectify them in order to improve your score.
- Make sure you are on the electoral roll at your current address.
- Make sure all payments to creditors are made on time, as this will demonstrate a commitment to improving your credit score.
- Consider speaking to a financial adviser who can help you create a budget and make better financial decisions going forward.
- If possible, get someone with good credit history to be added as a co-applicant on the mortgage application form in order to increase the chances of approval.
Getting a mortgage with poor credit history is complicated, and it is important to understand the process before making any decisions. It is best to seek advice from an experienced mortgage broker who can help you find the most suitable lender. They will be able to explain your options and guide you through the application process.
What is a Bad Credit Mortgage and How Does it Work?
A bad credit mortgage is crafted for individuals with a poor credit history or a low credit score. These mortgages are extended by specialist lenders who take into account factors beyond credit scores, such as your financial situation, missed payments, and debt management plans. Despite instances of late payments or adverse credit, these mortgages provide an opportunity to step onto the property ladder or make a property investment.
How Does a Bad Credit Mortgage Differ from a Standard Mortgage?
Unlike a regular mortgage from a high street lender, a bad credit mortgage takes into consideration your individual circumstances, including past credit issues, missed payments, and poor credit history. Specialist lenders tailor mortgage deals to suit your financial history, offering a chance to secure competitive rates even if you have a low credit score.
What Steps Can I Take to Improve My Eligibility for a Bad Credit Mortgage?
Enhancing your chances of securing a bad credit mortgage involves managing your finances responsibly. Make timely payments for your bills, showcase consistent repayments, and work on building a stronger credit profile. Seeking professional advice from a bad credit mortgage broker can provide invaluable insights into navigating the application process.
How Can a Bad Credit Mortgage Broker Assist Me?
A bad credit mortgage broker specialises in aiding individuals with poor credit scores or adverse credit histories. They possess access to a network of specialist lenders and can align your unique circumstances with the right mortgage product. Their expertise in dealing with credit issues and liaising with lenders can significantly improve your chances of obtaining mortgage approval.
What Factors Should I Consider When Selecting a Bad Credit Mortgage Lender?
While choosing a bad credit mortgage lender, focus on their experience in handling adverse credit issues, the array of mortgage products they offer, and their reputation within the industry. A suitable lender should be transparent about their terms, eligibility criteria, and interest rates. It’s crucial to ensure that the mortgage deal aligns with your financial goals and repayment capacity.