Updated: February 19, 2021
Let’s start by getting the bad news about guaranteed approval for bad credit mortgages out of the way first, because guarantees don’t exist in the world of mortgage lending.
Since every lender is different, even someone with squeaky-clean credit doesn’t have the luxury of guarantees when it comes to getting a mortgage loan. Even if you’ve got your mortgage in principle (AIP), things can still go wrong and the lender can change their mind if they don’t like something when making further checks.
With all that said, having a history of adverse credit on your file doesn’t automatically mean you can’t get approved for a mortgage loan. In fact, there are specialist adverse credit lenders who will measure your eligibility for lending fairly and, depending on your circumstances, you could even qualify for ‘standard’ interest rates.
Because getting approval for a bad credit mortgage, while possible, will take time and planning, this article explains how mortgage lender criteria influences your eligibility for a mortgage and how you can position yourself for the best chance of securing a mortgage.
Yes, depending on your circumstances, it may be possible to get mortgage approval from a specialist lender.
This will come down to the following factors:
To stand the strongest chance of getting a mortgage when you have bad credit on your file, take a systematic approach. If you’re applying for a mortgage when you have bad credit it’s good practice to find out if you’re likely to be accepted before making your application.
Every lender you apply to will do a mortgage credit check and, if they performed what is known as a hard credit search, this will show up on your report for other lenders to see. By being cautious about which lender to apply to, you can save yourself a whole heap of hassle and heartache. And, more importantly, save your credit file from further unnecessary damage.
To increase your chances of getting approved for a mortgage when you have bad credit, your best bet is to seek advice from a specialist bad credit mortgage broker, like those we work with. Taking a holistic view of your bad credit and your current circumstances, they will work to match you with a lender who is best positioned to approve your application.
Get in touch for a free, no-obligation chat and we’ll connect you with a broker who can help you get the ball rolling in the right direction.
When you have bad credit, getting pre-approval for a mortgage is relatively unlikely. Pre-approval for a mortgage means a lender has confidence in your application. This will likely require you to have the right level of deposit and an income which easily covers your mortgage repayments.
While it’s unlikely that you’ll easily find a lender willing or able to give you pre-approval, when applying for a mortgage with bad credit on your file, there are things you can do to help you stand a better chance of success…
While mortgage pre-approval with bad credit on your file is unlikely, there are practical things you can do to help improve your chances of getting mortgage approval, including:
Yes, depending on your circumstances, with the right strategy and approach it can be possible. Most mortgage providers and brokers work online and will accept applications and support documentation via email or secure online portals. These days it is fairly common practice for a borrower to never actually come face-to-face with a lender representative or their mortgage broker.
Most of the specialist experts we work with have the capability to do all their work online and over the phone, get in touch for a chat. There’s no obligation to act on their advice and we don’t charge a penny for this service.
How easy you find it to get mortgage approval with bad credit on your file will come down to the type of bad credit on your record and how long ago the issue occurred.
If, for instance, you have a bankruptcy on your file, you won’t even be able to apply for a mortgage until it has been discharged. Most lenders will want to see a period of good financial conduct and otherwise clean credit history during the intervening years before they will consider lending.
While you may be able to find a lender willing to lend to you if you’ve had a property repossessed in the last three years, rates you’ll be charged will almost certainly be high.
As a general rule, if you have a history of bad credit, the longer you have maintained good financial conduct without other problems, the more likely it is you’ll get your mortgage application approved.
As we’ve explained, getting approval for a mortgage when you have bad credit will depend on various circumstances and your current financial situation. However, if you meet all other eligibility and affordability criteria for a lender, the following should help provide you with a rough idea of how easy you might find it to get your application approved.
The table below gives you a rough guide to the likelihood of getting mortgage approval based on different types of bad credit and how long ago they occurred.
|.||0-12 Months||1-2 Years Ago||2-3 Years Ago||3-4 Years Ago||4+ Years Ago|
|CCJs||Maybe (with good LTV)||Maybe (with good LTV)||Yes||Yes||Yes|
|Defaults||Maybe (if good LTV)||Maybe (if good LTV)||Maybe (if good LTV)||Yes||Yes|
|Debt Management Plan||No||Yes||Yes||Yes||Yes|
While the above data is correct at time of writing (November 2020), it only provides a rough example of what you might be able to expect.
To get accurate, bespoke information relating to your credit issue and other financial circumstances, make an enquiry and speak to one of the expert mortgage brokers we work with.
Let our free broker-matching service do all the hard work in finding the advisor with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.
*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.
Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.