You can receive a mortgage no matter what your credit standing is. All you have to do now is talk to the proper individuals. That’s why, at The Areton ltd, we have counsellors that specialise in helping people with bad credit secure a mortgage.
Finding a high-street lender prepared to grant a mortgage can seem unattainable if you’ve experienced financial problems in the past. We have access to the entire market and can make inquiries with the appropriate lenders to find you the best offer and begin you on the road to house ownership.
Bad Credit Mortgages
A bad credit mortgage is a term used in the business to describe a house loan offered by a specialist lender to borrowers who have had financial troubles in the past. Lenders will typically offer negative credit mortgages at a slightly higher interest rate, and you may be required to put down a larger deposit or give more equity.
We deal with people just like you every day, so we know that no two situations are the identical, and that many of you could still qualify for a mortgage at conventional rates despite previous financial difficulties. The mortgage industry is evolving, and many mainstream lenders now consider features of bad credit, so you may not need to use a specialist lender. We’ll be able to simply figure out the appropriate course of action once we’ve reviewed your credit report and discussed your situation.
Bad Credit Mortgage Rates
Because lenders perceive a larger risk in lending to those with a less-than-perfect financial history, interest rates on bad credit mortgages are often higher than those on standard house loans. However, the business has evolved as more lenders have entered the market and new products have been developed, giving potential borrowers more options. Many lenders have continued to reassess their conditions and requirements as competition for consumers has intensified, and interest rates have moved closer to conventional rates as a result.
A lender’s interest rate will be influenced by the difficulties of your previous credit history, but they will also consider other factors such as your loan-to-value ratio (often referred to as LTV, being calculated according to the deposit you can make or level of equity you hold).
Due to all of the factors that can contribute to determining interest rates, bad credit mortgages to do generally appear in ‘best buy’ charts. Our knowledgeable consultants, on the other hand, are familiar with the many criteria used by lenders and will know where to look in the market to locate the ideal solution for your needs.
Bad Credit Mortgage Lenders
Following the financial crisis of 2008, mortgage lenders tightened their terms, denying loans to all but the most creditworthy customers with the lowest loan-to-value ratios. Because of the resultant market gap, the position of the’specialist’ lender – someone who caters particularly to persons who have experienced financial troubles, with solutions tailored to their needs – has steadily risen since then.
In contrast to a mainstream lender (who, if they accept applicants with a poor credit history at all, will typically have no set criteria for bad credit clients), specialist lenders will have outlined the types of conditions they are willing to accept, some down to the specifics of the types of events, when they occurred, and the amount involved. Our expert brokers will be familiar with each lender’s standards and will be able to tell you which one is ideal for you.
Can you get a mortgage with Bad Credit?
Having a bad credit history makes getting a mortgage more difficult, but it is still doable in the majority of circumstances. Here are a few things you can do to improve your credit score and increase your chances of securing a mortgage with terrible credit.
- How to raise your credit score:
- To begin, make sure you do the following:
- If you haven’t previously done so, register to vote on the Electoral Roll.
- Close any credit cards you don’t use, such as store cards.
Request copies of your credit report from the three major credit bureaus in the United Kingdom.
The next step
- Check your credit reports for accuracy, and if any include inaccuracies, contact the issuers to have them corrected.
- List all of your incomings and outgoings, as well as a realistic household budget, to demonstrate that you are entirely in control of your finances.
If you’re still having trouble sticking to your household budget, double-check your numbers to see if you left enough room for bills and other expenses, or if you neglected to factor in some extra expenditure.
Create a savings account and make a monthly deposit (however modest) into it. Put everything extra you get – like a ‘free’ council tax month or an unexpected rebate – in there as well.
Because specialist lenders price their products based on perceived risk levels, their interest rates will always be slightly higher than those on the high street. The amount you can borrow may also be limited based on what they believe you can afford.
What issues have an impact on cost?
- The amount and type of negative credit events on your credit report, as some will be weighted more heavily than others. Paying your cell phone bill late once in a while isn’t a big deal, but defaulting on your mortgage is a far bigger one.
- When did your credit problems start? These are kept on your record for six years, but the older they are, the less impact they have on how lenders view your risk.
- The forgiveness of past debts.
- The loan-to-value ratio (LTV) (LTV). The lender is more likely to receive their money back if you are unable to keep up with your payments if they lend a smaller percentage of the property’s worth.
In addition to the foregoing, the lender will consider your presence on the electoral roll, your debt-to-income ratio, and how frequently you have changed employment or moved houses. Lenders will consider your entire application in order to determine its overall strength and make an informed judgment.
How much will a mortgage with bad credit cost me?
The only way to receive a definitive answer to this issue is to meet with one of our consultants, who will be able to assess all of your circumstances and provide you with an accurate estimate of the expenses based on the amount you wish to borrow. In the meanwhile, use our Bad Credit Mortgage Calculator to receive an estimate of your approval odds and the amount you might be able to borrow.