More and more people in the modern day are encountering financial difficulties, which more often than not leads to a bad credit score. Anyone approaching mainstream lenders for their first home with adverse credit is likely to struggle to get approved. However, whilst having bad credit is definitely an obstacle to getting a mortgage, it’s not necessarily going to stop you in your tracks, as any mortgage advisor worth their salt will tell you.
IVAs & Bankruptcy
Now, bad credit is a pretty broad term to use, as it can range from simply have a low credit score, to being bankrupt or in an Individual Voluntary Arrangement (IVA). Providing mortgage advice in this scenario is a pretty simple, as the rules governing IVAs and Bankruptcy are usually very clear. Typically speaking, you won’t be able to obtain a mortgage until 6 years after your IVA or Bankruptcy are officially registered, but once it’s been expunged from your credit file, you can start the process of rebuilding your score.
The good news is that there are mortgage brokers out there who have access to deals offered by lenders who specialise in helping people with adverse credit. This type of lender tends to use a set of affordability criteria that takes a person’s entire financial picture into account, with the operative word being affordability. Often, with this kind of lender, if you can show that you can afford the mortgage you’re applying for, you stand a good chance of being approved.
We’re not going to sugar coat it though, as you will probably have to jump through a few hoops and the rates you are offered may not be as good as the deals offered on the high street, but it’s a far better situation to be in than simply being turned downed flat.
Improving Your Credit Score
The more you can do improve your credit score, the better your chances are of finding a mortgage broker that is able to help you. There are a number of easily implementable measures that you can take to boost your score, one of which is to take out a Credit-boosting credit card (E.g. the Vanquis Card). These kind of products are designed for this very purpose and whilst it might seem counterintuitive to borrow more, operating a card like this at a 15-20% balance and paying on time every month can really help improve your credit rating, as it demonstrates your ability to manage credit sensibly.
We’d highly recommend staying away from high cost credit (e.g. Payday Loans) however, as this will have the opposite effect. This kind of product is viewed as emergency credit and not something that’s used by someone who’s good with money.
Need Some Specialist Mortgage Advice?
At Yes Mortgage Services, we offer simple, honest mortgage advice with no broker fee charged on any mortgage products we provide. At the centre of everything we do is a dedication to finding the right mortgage for every customer, regardless of what we stand to make in commission. The most important part of any mortgage advice we provide is that it’s’ the right thing for you and we adhere to the FCA’s ‘Treating People Fairly’ in everything we do.
We’re pretty flexible too and are able to come to your home to talk through your mortgage options, even if the only time you have available is in the evening.
If you’d like to find out more about anything discussed here, you can call us free on 0800 612 5596 or if you’d like to find out more about us and our knowledgeable team you can find us online at www.yesmortgageservices.co.uk or connect with us on social media http://bit.ly/2URtfua.
So, before you write off your chances of getting a mortgage because of bad credit, get in touch, because we might just surprise you with what we find.
A whole of market Mortgage Broker, who doesn’t charge you a Broker fee.
Irrespective of whether you are looking to buy a new home, re-mortgage an existing property, or looking to protect your family from the unpredictability that life throws at it or protect your income if you are unable to work due to accident or ill health.
Yes Mortgage Services are committed to offering you the highest possible standards of service. We can undertake the whole process from answering the initial questions through to handling multiple product applications. Ensuring that everyone gets treated with the same urgency and maintaining your best interests are our main goals irrespective of the value of the mortgage.
We recognise that both we and our customers have everything to gain if we look after your best interests and treat you fairly in all aspect of our dealings with you.