Bad Credit Mortgage Brokers

Yes, there are specialist mortgage brokers for bad credit in the UK, such as John Charcol.

Bad credit isn’t uncommon, in fact there are thousands of people across the UK who are facing or have faced issues with bad credit in the past. If you find yourself in this category, you’re not alone and you can often still secure a mortgage, especially if you engage a mortgage broker specialising in bad credit.

If you have a bad credit history or adverse events on your file, you’ll likely need an adverse credit mortgage broker like John Charcol to secure a home loan. Why? Because most high street lenders won’t consider mortgage applications with bad credit. Instead, to secure a bad credit mortgage, you’ll need access to adverse mortgage lenders and deals that are only available through intermediaries like John Charcol.

A normal high street lender will use a credit score to assess how likely you are to be able to make mortgage repayments. The credit score they give you is calculated by looking at your financial history over the last 6 years. If you’ve missed credit card payments, you’re maxing out the credit that’s available to you, or you have a CCJ (County Court Judgement) against you, you’re likely to have a poorer credit score.

Due to the sheer volume of mortgage applications high street lenders receive, they’ll tend to sift out and reject those with poorer credit records in favour of those with clean records and better credit scores. This means if you have poor credit, you’re more likely to be declined for a mortgage if you go through normal high street lenders.

When assessing applicants for a mortgage, bad credit specialist mortgage lenders will complete a manual process that looks at various aspects of a person’s financial circumstances, which might include:

• An assessment of the borrower’s income and expenditure
• Proof of outgoings and income – including bank statements
• Looking at the reasons as to why the applicant fell into bad credit – e.g. was it a one-off incident like a death, divorce, or poor health that caused the poor credit problem
• Confirmation that positive action is being taken towards rectifying the bad credit issue

Different bad credit mortgage lenders have different criteria and an experienced adverse credit mortgage broker like John Charcol can help you navigate the different lending requirements.

Where a fairly modest credit issue is involved, such as missing low value payments on a mobile phone bill or a store card, most bad credit mortgage lenders won’t see this as having too much of an impact on your ability to repay a mortgage and will be happy to accept you, assuming you meet their other criteria. But, if you have a more serious credit issue like defaulting on high value mortgage payments, bankruptcy, or repossession, then you’ll be much more limited in the lenders that are likely to approve your application. This is one of the areas where we can help you understand what bad credit issues different lenders are likely to accept or not.

Choosing the right bad credit mortgage broker is important in making sure you understand and have access to all available mortgage options and get the necessary support throughout every stage of your mortgage application.

In addition to using our in-depth knowledge of different lender eligibility criteria to match your circumstances and needs to lenders who are most likely to accept your application, John Charcol offer an end-to-end personalised service to our clients, including:

• Access to the whole of the mortgage market (which only independent brokers have), including specialist bad credit lenders who only work through intermediaries
• Genuinely independent recommendations on lenders, mortgages and other products
• Special deals and exclusive offers
• Clear and fair fees or charges for using their services
• Experience in dealing with diverse and complex credit issues and bad credit mortgages

As a specialist bad credit mortgage broker, John Charcol provides all these services and more. We’re used to providing bespoke help to assist customers in many diverse financial situations and find the right mortgage deals. This means we’re adverse credit experts too. We’ll ask all the right questions to understand your bad credit circumstances and use our experience to help you access the best deals on the market with the right lenders.

To be able to accurately assess your situation and needs, a bad credit mortgage broker will ask for various bits of information, including:

• How much deposit you have – for a normal mortgage you would typically need 5% – 10%, whereas for a bad credit mortgage you might need 15% up to 25%. In most circumstances, the more deposit you have, the better the mortgage rates you’ll be able to secure. If you’re remortgaging, you’ll be able to use the equity in your property as security
• How old you are – mortgage lenders may have an age cap and won’t lend to over 85s, for example
• Income – how much you can borrow is based on your income, expenditure and situation
• Expenses and financial obligations – this will include information on any dependents you have, regular outgoings and other loans or debts
• Reasons for bad credit – if your mortgage broker understands the reasons for your poor credit – e.g. poor health and that steps have been or are being taken to resolve the issue, they can more easily align a suitable mortgage lender that is more likely to consider your application
• The type of property you’re purchasing – it’s easier to get a mortgage for standard bricks and mortar buildings, whereas you might require a lender with more flexible criteria for more unusual properties, like those with timber or steel frames or thatched roofs. This is because non-standard houses are considered to come with the risk of more complications

Yes, it’s possible to get a mortgage with bad credit, but it may come with certain challenges and conditions. If you have adverse credit, you might still be able to get a mortgage through normal channels, but it largely depends on how recent and how serious the bad credit event was.

Most lenders are likely to consider you a higher risk and reject you for a mortgage if a credit event has happened recently or was serious, for example, if you’ve defaulted on several credit card or mortgage repayments in the last 12 months.