What is a bad credit mortgage?
Looking for a mortgage, but have bad credit? Maybe you’ve even previously been turned down by other advisors or mortgage directly by mortgage lenders. But don’t be disheartened. We may be able to help, just as we done for many clients before you.
All lenders have different criteria and as a whole-of-market mortgage advisors, we can help. But what exactly is bad credit defined by? Unfortunately, there are no stead fast rules, but there are certain criteria that will place you in the ‘high risk’ category…
Primarily in the form of missed loan or credit card repayments. All lenders will want to know details of your monthly income and outgoings, but also any savings. What you earn vs what you spend. Can you realistically cover the repayments if you are approved?
We can investigate this for you – we can find out your credit score – but if its something you’d like to find out for yourself, being speaking with us, then simply register yourself with Experian. Experian are the industry leaders in credit scoring and can provide an idea of how you are rated, where you stand financially in the eyes of lenders.
The better your credit score, the higher your chance of being approved for a mortgage. Not only that, but you may also benefit from lower mortgage interest rates.
So exactly what can you do improve your chances?
1. Be responsible and take accountability for your finances – pay your monthly bills (utility, council tax, credit card etc) on time and in full.
2. Look at your monthly expenditure – what can you do to reduce your outgoings? Do you pay monthly membership fees for something you no longer use? We can always cut costs when needs must, and it will always stand you in good stead if your bank account is in credit at the end of each month.
3. Keep an eye on your credit score – is the information held in your credit report up to date? Do any changes need to be made? If so, you can contact the relevant lenders yourself or you can ask Experian to do it for you. It’s a free service, so take advantage.
4. Ask a family member if they would be willing to act as a guarantor against the mortgage – if, for whatever reason, you are unable to make a payment, they would be able and willing to step-in and cover it on your behalf.
5. Get a decent deposit in place – it will definitely help.
As advisors, we can determine just how much you can borrow and how much you will need to repay each month – this payment will go towards the loan amount as well as the interest charged.
Once you have a clear idea of what you can realistically afford, restrict yourself and only view properties that fall within your threshold. There is no point viewing a property, that you may well fall in love with, only to be denied a mortgage to cover it, let alone be able to repay it.
Be realistic, be honest and we will do our very best to find you a lender.