Mortgages with Bad Credit

Steven Neale
By Published On: March 6, 2023Last Updated: July 11, 2024

Finding a mortgage with bad credit can be difficult and has to be approached carefully. Due to the shortage of lenders available in this market, getting the application right the first time is very important. Having the experience of a specialist adverse credit mortgage broker will greatly enhance your chances of success.

I’ve helped many people with defaults to find a mortgage. For a free no obligation chat, get in touch today.

Can I get a mortgage with a bad credit?

It is possible to get a mortgage with bad credit, but it is something which should be approached with great care. Many high street lenders will reject mortgage applications where credit issues are present, so understanding which lenders to approach is key. Having too many mortgage applications rejected will further damage your credit rating.

Credit issues come in all shapes and sizes, from a minor late payment up to bankruptcy and repossession. The less serious (and frequent) your credit issues are, the easier you’ll find it to get your mortgage application accepted. Having said that, I’ve helped people with severe credit issues including bankruptcy and repossession cases to get accepted.

Which lenders will give a mortgage with bad credit?

For the majority of credit issues, you will struggle to get a mortgage with a high street lender due to their strict lending criteria. For a small credit issue such as a late (non-mortgage) payment several years ago, with a good excuse, you may have a chance. However, randomly applying with highstreet (or specialist) lenders without knowing their lending criteria can harm your chances of success overall, as repeated application rejections will further damage your credit file.

How will bad credit affect my mortgage application?

Having credit issues when applying for a mortgage will be a red flag for most high street lenders, and likely result in a rejection. There are several specialist lenders who will accept credit issues on a mortgage application. Knowing which lenders these are, and what the specifics are around the particular credit issues within their lending criteria is key.

I specialise in adverse credit mortgages and have a complete list of lending criteria and will match you with a lender who accepts the number of and kinds of credit marks you may have on your file.

Do you have to declare a bad credit issue on your mortgage application?

Yes, definitely. Any debts or bad credit marks must be declared when applying for a mortgage. It is incredibly important, and a legal requirement, to be completely truthful when applying for a mortgage. In addition, the lender’s credit checks will almost certainly identify any debts registered to you, including if any missed payments or defaults have been registered against you.

How long after a credit issue can you get a mortgage?

The amount of time between the adverse marks on your credit file and your mortgage application is crucial.

For example, if you had a CCJ or Default that was registered more than 6 years ago, you could get a mortgage today without a problem. However, if they were 3 to 6 months ago, it would be much harder to get a mortgage – though not impossible, as I have lenders who would consider you even in these circumstances.

If you are in a Debt Management Plan, some lenders will only lend if it finished 12 months ago, whereas others say it must have been running for 12 months but does not have to be cleared. And some lenders even say there is no minimum term it has to have been running.

Does your bad credit need to be cleared before you can get a mortgage?

No they do not. Although clearing any bad debt may help your application, the main issue is the fact that you actually had the issue in the first place. A lender will likely look at an outstanding credit issue such as an unpaid debt and a cleared default in the same way – the issue is you defaulted or missed a payment on a credit agreement.

How much can you borrow with a bad credit?

This really depends on what the particular credit issue is, and the circumstances of it. 

Generally for a standard property you could borrow up to 95% with poor credit, if your credit history has been OK for the past few years. This is where time is important as the shorter the period between credit issues and the mortgage application, the more deposit you will likely have to put down.

If your bad credit is related to a default, any defaults registered over 2 years ago can be ignored up to 85% loan to value and do not have to be repaid. If they were registered over 36 months ago, you could borrow up to 95%. However defaults are just one type of credit issue. It may be more difficult to borrow more if the credit issue was a CCJ or bankruptcy. 

The important thing to remember when looking at your credit file is the date the credit issue was registered and the amount. When they were cleared is important to some lenders as they will not lend unless they have been paid off before making a mortgage application.

What deposit will you need for a mortgage with bad credit?

The LTV and required deposit required will largely come down to the specific circumstance of your credit issue, as well as other factors on your application. Generally, the longer ago the credit issue was registered on your credit file, the lower the required deposit will be. Whether the bad credit mark is cleared will also play a big factor in the size of the deposit required.

Different lenders will have their own rules around required deposits for mortgages with bad credit, but the figures below can be used as a guide for defaults:

Deposit LTV Default Status
0%

5%

100%

95%

100% mortgages available when buying a Shared Ownership property.

Quite a few lenders offer 95% mortgages if you have a poor credit history.

10% 90% 0 recorded in last 12 months.
Maximum of one settled default recorded in the last 13 – 36 months up to a maximum of £500
Defaults registered over 36 months ago are ignored.
15% 85% Unlimited defaults if registered over 2 years ago.
Within 2 years accepted with conditions.
20% 80% Maximum of 4 defaults within the last 2 years – 0 in the past 3 months
25% 75% Unlimited defaults registered over 1 year ago
30% 70% None registered in the past 3 months

How a mortgage advisor can help with bad credit

I understand exactly which lenders will accept mortgage applications from those with bad credit – at various levels – and the exact lending criteria for each. Once I’ve discussed your individual circumstances with you, I can match that with a lender to find you a mortgage.

I have decades of experience in helping those with defaults to get a mortgage, and ensuring they get the application right first time, as well as getting the best deal available for them. 

For more information or to discuss your application, please call me on 01494 526 400 or complete my online enquiry form today.

FAQs

A bad credit mortgage, typically offered from a specialist lender, is a type of mortgage aimed at those who have a poor credit history and would otherwise struggle to be accepted for a standard mortgage from a high street lender.

Depending on the lender and personal circumstances, bad credit mortgages can be offered to applicants with a wide range of credit issues, such as missed payments and arrears to defaults and CCJs. I’ve also helped many clients with more serious credit issues, such as IVAs, Discharged Bankrupts, DMP’s and repossessions.

Any credit issue from a missed or late payment to a default or CCJ will stay on your credit file for 6 years after it was first registered. To limit this time as much as possible, it’s worth checking your credit file to confirm the issue has been registered on the correct date, and not several months later or differently with different credit reference agencies.

Technically there is no such thing as a ‘bad credit mortgage’ but the term can be used to describe mortgage products from lenders who have lending criteria which allows for a certain level of credit issues on an applicant’s credit file.

If your partner has marks registered on their credit file, this can lead to mortgage application rejections from high street lenders. However, there are many specialist lenders who will be happy to provide a mortgage where a partner has one or more bad credit issues.

Your chances of acceptance will come down to the details of the particular credit issue, when they were registered and the status of them.

Mortgages with Bad Credit

Steven Neale
By Published On: March 6, 2023Last Updated: July 11, 2024

Finding a mortgage with bad credit can be difficult and has to be approached carefully. Due to the shortage of lenders available in this market, getting the application right the first time is very important. Having the experience of a specialist adverse credit mortgage broker will greatly enhance your chances of success.

I’ve helped many people with defaults to find a mortgage. For a free no obligation chat, get in touch today.

Can I get a mortgage with a bad credit?

It is possible to get a mortgage with bad credit, but it is something which should be approached with great care. Many high street lenders will reject mortgage applications where credit issues are present, so understanding which lenders to approach is key. Having too many mortgage applications rejected will further damage your credit rating.

Credit issues come in all shapes and sizes, from a minor late payment up to bankruptcy and repossession. The less serious (and frequent) your credit issues are, the easier you’ll find it to get your mortgage application accepted. Having said that, I’ve helped people with severe credit issues including bankruptcy and repossession cases to get accepted.

Which lenders will give a mortgage with bad credit?

For the majority of credit issues, you will struggle to get a mortgage with a high street lender due to their strict lending criteria. For a small credit issue such as a late (non-mortgage) payment several years ago, with a good excuse, you may have a chance. However, randomly applying with highstreet (or specialist) lenders without knowing their lending criteria can harm your chances of success overall, as repeated application rejections will further damage your credit file.

How will bad credit affect my mortgage application?

Having credit issues when applying for a mortgage will be a red flag for most high street lenders, and likely result in a rejection. There are several specialist lenders who will accept credit issues on a mortgage application. Knowing which lenders these are, and what the specifics are around the particular credit issues within their lending criteria is key.

I specialise in adverse credit mortgages and have a complete list of lending criteria and will match you with a lender who accepts the number of and kinds of credit marks you may have on your file.

Do you have to declare a bad credit issue on your mortgage application?

Yes, definitely. Any debts or bad credit marks must be declared when applying for a mortgage. It is incredibly important, and a legal requirement, to be completely truthful when applying for a mortgage. In addition, the lender’s credit checks will almost certainly identify any debts registered to you, including if any missed payments or defaults have been registered against you.

How long after a credit issue can you get a mortgage?

The amount of time between the adverse marks on your credit file and your mortgage application is crucial.

For example, if you had a CCJ or Default that was registered more than 6 years ago, you could get a mortgage today without a problem. However, if they were 3 to 6 months ago, it would be much harder to get a mortgage – though not impossible, as I have lenders who would consider you even in these circumstances.

If you are in a Debt Management Plan, some lenders will only lend if it finished 12 months ago, whereas others say it must have been running for 12 months but does not have to be cleared. And some lenders even say there is no minimum term it has to have been running.

Does your bad credit need to be cleared before you can get a mortgage?

No they do not. Although clearing any bad debt may help your application, the main issue is the fact that you actually had the issue in the first place. A lender will likely look at an outstanding credit issue such as an unpaid debt and a cleared default in the same way – the issue is you defaulted or missed a payment on a credit agreement.

How much can you borrow with a bad credit?

This really depends on what the particular credit issue is, and the circumstances of it. 

Generally for a standard property you could borrow up to 95% with poor credit, if your credit history has been OK for the past few years. This is where time is important as the shorter the period between credit issues and the mortgage application, the more deposit you will likely have to put down.

If your bad credit is related to a default, any defaults registered over 2 years ago can be ignored up to 85% loan to value and do not have to be repaid. If they were registered over 36 months ago, you could borrow up to 95%. However defaults are just one type of credit issue. It may be more difficult to borrow more if the credit issue was a CCJ or bankruptcy. 

The important thing to remember when looking at your credit file is the date the credit issue was registered and the amount. When they were cleared is important to some lenders as they will not lend unless they have been paid off before making a mortgage application.

What deposit will you need for a mortgage with bad credit?

The LTV and required deposit required will largely come down to the specific circumstance of your credit issue, as well as other factors on your application. Generally, the longer ago the credit issue was registered on your credit file, the lower the required deposit will be. Whether the bad credit mark is cleared will also play a big factor in the size of the deposit required.

Different lenders will have their own rules around required deposits for mortgages with bad credit, but the figures below can be used as a guide for defaults:

Deposit LTV Default Status
0%

5%

100%

95%

100% mortgages available when buying a Shared Ownership property.

Quite a few lenders offer 95% mortgages if you have a poor credit history.

10% 90% 0 recorded in last 12 months.
Maximum of one settled default recorded in the last 13 – 36 months up to a maximum of £500
Defaults registered over 36 months ago are ignored.
15% 85% Unlimited defaults if registered over 2 years ago.
Within 2 years accepted with conditions.
20% 80% Maximum of 4 defaults within the last 2 years – 0 in the past 3 months
25% 75% Unlimited defaults registered over 1 year ago
30% 70% None registered in the past 3 months

How a mortgage advisor can help with bad credit

I understand exactly which lenders will accept mortgage applications from those with bad credit – at various levels – and the exact lending criteria for each. Once I’ve discussed your individual circumstances with you, I can match that with a lender to find you a mortgage.

I have decades of experience in helping those with defaults to get a mortgage, and ensuring they get the application right first time, as well as getting the best deal available for them. 

For more information or to discuss your application, please call me on 01494 526 400 or complete my online enquiry form today.

FAQs

A bad credit mortgage, typically offered from a specialist lender, is a type of mortgage aimed at those who have a poor credit history and would otherwise struggle to be accepted for a standard mortgage from a high street lender.

Depending on the lender and personal circumstances, bad credit mortgages can be offered to applicants with a wide range of credit issues, such as missed payments and arrears to defaults and CCJs. I’ve also helped many clients with more serious credit issues, such as IVAs, Discharged Bankrupts, DMP’s and repossessions.

Any credit issue from a missed or late payment to a default or CCJ will stay on your credit file for 6 years after it was first registered. To limit this time as much as possible, it’s worth checking your credit file to confirm the issue has been registered on the correct date, and not several months later or differently with different credit reference agencies.

Technically there is no such thing as a ‘bad credit mortgage’ but the term can be used to describe mortgage products from lenders who have lending criteria which allows for a certain level of credit issues on an applicant’s credit file.

If your partner has marks registered on their credit file, this can lead to mortgage application rejections from high street lenders. However, there are many specialist lenders who will be happy to provide a mortgage where a partner has one or more bad credit issues.

Your chances of acceptance will come down to the details of the particular credit issue, when they were registered and the status of them.

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Anon – 4th March 2024

Steven and Sue have been absolutely wonderful throughout the whole mortgage application process. Even when we were unsuccessful with our first application which left us panicking, Steven remained calm and professional, informed us there were plenty of other options and worked quickly on a new application suited to our needs. Steven would answer his phone efficiently and if he missed us, he would call back immediately, something which can be quite rare these days. We would recommend Steven and Sue to anyone that maybe struggling with the whole mortgage process, especially the self employed, they took all the stress from us and deserved every single penny we payed them. We will absolutely be returning to Steven and Sue in the future and only wish we had found them sooner. We found them to be invaluable and an absolute pleasure to deal with, they are the reason we can finally sleep well at night! Thank you both again.

Oldham – 22nd February 2024

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Kunda – 15th February 2024

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Anonymous – 6th February 2024

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Martin – 2nd January 2024

I have felt very well looked after throughout this process, and advocated for, to meet my individual financial needs. The communication between Steven, Sue and I has been of the highest standard, and I could not have asked for more. I was treated without prejudice, and with understanding, and I am so happy that I have been able to buy a home which my daughter and I can now settle into, and start a new chapter. Thank you so much Steven and Sue!

Hentschell – 21 November 2023

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