Prior to 2007, it was relatively easy to get your hands on a mortgage to buy a property even if you had bad credit history. Most mortgage lenders would consider mortgage applications from people who may have experienced financial difficulties such as having missed a mortgage payment or two, experienced arrears or gone bankrupt. Furthermore, most lenders would provide mortgages to people with a County Court Judgement (CCJ) or two against their name, as these are all too easy to come by if you miss a utility or mobile phone bill, for example.
The financial crash brought about a swift end to what were labelled sub prime mortgages. Many mortgage lenders withdrew from the non-standard mortgage market, leaving many people stranded with no access to finance for their first home and thousands more 'mortgage prisoners', stuck with their existing lender and with nowhere to go for a better or more appropriate deal.
In the new climate of risk averse lending, mortgage providers tightened their lending criteria and demanded much bigger deposits than they did pre credit crunch which meant more applicants failed credit checks when applying to the larger lenders.
Luckily in recent times a new breed of specialist lender has emerged to cater for what has been termed the near prime market. In 2015 there is now a wider range of mortgage products for those who are likely to fail credit scoring with mainstream lenders. New lenders have sort to plug what they see as a gap in the market and are offering a range of mortgage deals for those who may be turned down for a mortgage by the high street.
So if you are looking to take out a mortgage, but have been spurned elsewhere because of a poor credit score or you already know your credit profile leaves something to be desired, contact us to see how we can help.
As a specialist mortgage broker we have access to lenders who won't automatically decline you because of a low credit score, even if you have defaulted on a previous mortgage, been in arrears or have a CCJ against your name.
If your personal circumstances mean you are likely to fall below the standards set by the larger lenders, your best route is likely to be a specialist lender. Ultimately the key test to determine whether you are likely to get accepted is affordability. If after all your monthly outgoings you can comfortably afford to service the repayments on a mortgage, you have a realistic chance of finding a lender who will say 'yes'. Providing you have a regular income, your finances are now under control and your have saved up a deposit of at least 10% or have equity in your property of 10%, there is a good chance someone might be willing to take you on as a borrower.
Brokers are mortgage experts, and they work with lenders daily to arrange deals for their clients. Because of this they know the market inside out and are aware of which lenders offer deals that will suit your specific needs.
But they go one step further than that, because mortgage brokers deal with a wide range of lenders that are not available on the high street.
These intermediary-only lenders will only offer their products to borrowers who go through a mortgage broker, so if you choose do get a mortgage direct you are missing out on a huge swathe of potentially mortgages suitable for people with bad credit history.
Whether you're an aspiring first time buyer looking to take your first step on the housing ladder or an existing homeowner looking to remortgage to get a better rate, contact us to whether we are able to help.
Research from credit card provider aqua suggested 21% of those questioned didn't realise their credit rating was a pivotal factor in determining whether or not they'd be accepted for a mortgage. When broken down amongst age groups, this figure jumped sharply for the young adults category with nearly half of 18 to 24 year olds and 40% of 25 to 34 year olds not appreciating their credit score would be used as lending criteria. Fortunately, specialist lenders individually examine each application, so it's not simply a case of your number not being high enough.