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Adverse Credit

Although your options may be limited because of adverse credit, it may still be possible to secure a mortgage – especially if you use a whole of market broker. There are a whole range of poor credit mortgage lenders out there and knowing where to look in these scenarios is key to success.

Even if you have been declined by your high street lender, don’t let that put you off from having a conversation with your broker who will be able to advise on alternative options.  

There’s no avoiding lender’s having to conduct a credit search but there are a few steps you can follow to improve your chances of being approved even with your poor credit.

01

Give it time

Black marks on your report may become less significant over time, especially if this is partnered with an improved financial position. Sometimes just waiting an extra 6 months can make a significant difference.

02

Improve your score

Put steps in place now to improve your score in preparation for your application. We’ve put some simple steps together here that you may find useful.

03

Be honest

Be open and upfront with your broker and mortgage lender, it will damage your chances if you try to hide your adverse credit.

04

Explanations

Lenders are open to hearing why you found yourself in financial trouble, so if you have a reasonable explanation and can show that positive changes have been made since then it may improve your chances.

05

Use a whole of market broker

Using a broker with access to multiple poor credit lenders as well as direct access to their underwriters will be hugely beneficial for you. They’ll know exactly who to approach based on your specific circumstances and will know what underwriters will want to see and hear for you to be approved. Even if you don’t get immediate approval, you’ll be able to come away with a plan to improve your chances in the near future.

06

Decrease the lenders 'risk'

Your chances of securing a mortgage will greatly improve if you can lower the ‘risk’ that lenders view you as. You can do this by increasing your deposit amount which in turn will lower the amount that you’ll need to borrow from the lender, or alternatively consider cheaper properties.

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FAQS

1. Can I get a mortgage with a poor credit score?

In short, yes it is possible to get a mortgage with a poor credit score/ adverse credit. However, specific details in regard to what had contributed to your poor score will be factored in to a lenders decision. In some extreme cases, you may need to wait for the adverse credit event(s) to be cleared from your file, which takes 6 years.

2. Why does a poor score make it harder to obtain a mortgage?

When you apply for a mortgage, lenders will assess the risks involved in the likelihood of you being able to keep up with loan repayments as agreed within the terms of your loan. The tool they use to assess this is your credit file, so if your credit file is displaying a poor score then lenders are going to view you as higher risk and are more likely to decline the loan request.

3. Will I have to pay more for a 'bad credit mortgage'?

In regard to the broker fee, Need Financial Planning would charge you the same fee as a standard mortgage application (£495 for a purchase, £295 for a remortgage). However, if we had to approach a specialist lender due to the nature of your adverse credit, you should expect higher mortgage rates due to the higher risk which will impact your monthly mortgage payment.

Your home may be repossessed if you do not keep up repayments on your mortgage.