It can feel challenging when you are trying to get a mortgage, but this can feel so much harder when you have what is often referred to as bad, poor or adverse credit. Although it should be noted it is not impossible.

There are a number of Mortgage Lenders who actually approve mortgage applications manually and realise that sometimes life can throw us curve balls meaning our credit scores decline.

The type of words you might hear in relation to bad credit, are things like CCJ, IVA, Debt Management plans, bankruptcy or missed payments – none of which preclude you from getting a mortgage, but it can feel a little more tricky and daunting.

We understand that finding a Mortgage Lender who is prepared to lend you money may not be easy, often the paperwork is confusing and rather complicated – so we aim to help guide you through this process and get a mortgage application approved. We take the time to know which Lenders will listen to your reasoning and process your application accordingly.

Bad Credit Mortgages

You may have seen people talk about “bad credit mortgages”. There is no separate mortgage product with that name. The phrase is used to describe mortgages from lenders who are willing to consider applicants with a bad, poor or adverse credit history, depending on their circumstances.

Mortgages of this kind may come with higher interest rates, because lenders often see a previous adverse credit history as a higher risk. They may also come with extra restrictions, such as a maximum age limit for applicants.

Do not panic. If you have bad credit, you may still be able to get a mortgage.

The term bad credit is used to describe a poor, low or adverse credit rating. This can be because you have no credit history, or because your history includes late or missed payments, CCJs, bankruptcy, debt management plans or debt relief orders. Some lenders will consider applicants in these situations, but there are a number of things that will need to be checked first, and approval is never guaranteed.

The first step is an affordability assessment. Every mortgage applicant has to complete one, whatever their credit history. Lenders need to see that you can realistically afford to repay the mortgage. An affordability assessment takes into account:

• Your credit score and credit report
• Your employment status and level of income
• Any other sources of income
• Money available to you, including savings
• Your level of debt
• Whether you live within your means (for example, whether you are always in your overdraft)
• Your monthly expenditure

If you have a bad, poor or adverse credit history and want to explore your mortgage options, arrange to talk to one of our advisers. They will talk you through the process and the next steps.