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Yes, you can get a mortgage with bad credit, but the number of lenders and mortgage products you can choose from will be less than someone with a good credit score. High street banks are most likely to decline those applying for a mortgage with bad credit. However, not all lenders are as strict, building societies and specialist mortgage lenders usually offer more flexibility for those with a bad credit history. Lenders usually charge higher interest rates for mortgages for those with bad credit because of the potential increased risk of default.
Take some time to repair your credit score, making consistent payments can help you to do this. Read more about how to improve your credit score using a mobile phone.
When you have a bad credit history its important you try to show the lender that you may not be as great a credit risk. A larger deposit can help to show this. Most lenders will want at least 25% for a mortgage with bad credit.
Lenders offering bad credit mortgages usually have these underwritten by human beings. This means they can apply context as to how a bad credit situation occurred. For example, life events such as divorce and illness can greatly impact your finances and lead to a temporary disruption to your ability to repay credit on time.
Based on our data here are the mortgage lenders that will currently consider those with a range of credit issues and histories:
Minor credit issues
Lenders happy to accept bad credit mortgages will look at your credit score and the details of your credit history. Lenders will judge different types of bad credit differently, for example a missed mobile phone payment is judged differently to a CCJ. Some bad credit mortgage lenders allow for a specific number of CCJs over a set period of time, others will consider those with bankruptcies while other will exclude this. Finding the right lender that suits your credit history is greatly assisted by speaking to a mortgage broker.
Our preferred mortgage broker Mortgage Advice Bureau can help you to find the right lender to suit your needs.
LOQBOX helps to grow your credit score while you save. Decide what you could save in a year. They lock away a 0% loan for that amount in your LOQBOX. You pay off the loan over 12 months, growing your credit score as you go to unlock better borrowing. Once your loan is repaid, you release every penny into a new bank account for free. Or into an existing account for £30.