Can I Get a Mortgage with Bad Credit?
Yes, in many cases you can. While high street banks may decline you, there are specialist lenders who specifically help people with credit problems. The key is finding the right lender for your situation.
What Counts as Bad Credit?
Bad credit is a broad term covering various issues on your credit file. Some are more serious than others in the eyes of lenders.
Common credit issues (from least to most serious):
- Late payments on credit accounts
- Defaults on credit agreements
- County Court Judgements (CCJs)
- Debt Management Plans (DMPs)
- Individual Voluntary Arrangements (IVAs)
- Bankruptcy
- Repossession
Factors Lenders Consider
Lenders don't just look at whether you have bad credit - they consider the context and how recent it is.
Key factors that affect your application:
- How long ago was the issue? (older is better)
- Has it been satisfied/settled?
- How much was it for?
- How many issues do you have?
- What caused it? (redundancy is viewed more sympathetically)
- Have you maintained clean credit since?
Deposit Requirements
With bad credit, you'll typically need a larger deposit. While good credit might get you a 5% deposit mortgage, bad credit lenders often require 15-25% or more, depending on the severity of your issues.
Interest Rates
Expect to pay higher interest rates with bad credit. However, this doesn't have to be permanent. After 2-3 years of maintaining your mortgage payments, you can remortgage to a better rate as your credit rebuilds.
Don't apply to multiple lenders - each application leaves a footprint on your credit file and can make things worse. Come to us first and we'll find the right lender for your specific situation.