Adverse Credit Mortgage
- Award-winning brokers who will navigate the complex mortgage marketplace for you
- Simple and clear advice – no jargon
- We have access to a comprehensive range of mortgage lenders – including very specialist lenders for your individual requirements
Get in touch for a free, no-obligation chat about how we might be able to help you.
Get In Touch
Adverse Credit Mortgage
Luke Platt explains how the mortgage process works if you have adverse credit.
Can I get a mortgage with adverse credit?
Yes, it is possible to get a mortgage with adverse credit. It will depend on the type of bad credit that you have. There are lots of different variants – Defaults, County Court Judgements (CCJs), Debt Management Plans, Individual Voluntary Arrangements (IVAs), Late Payments and so on.
If you’re looking to get a mortgage with adverse credit, the best thing to do is to obtain a copy of your credit report – or contact us and we can provide you with a free credit report trial link. We can then discuss your requirements and see if we can achieve your goals.
Are there specific lenders who specialise in mortgages with adverse credit?
Yes, there are several known ‘adverse’ lenders. Each lender has different criteria and set products for adverse credit. The products can vary, depending on when the adverse was registered. That’s why I would recommend reaching out to us here at Smiths Financial to discuss your requirements and needs, as we can research the right lender to meet those.
Some lenders may also accept as little as 5% deposit, whereas others may require 10% to 15% deposit depending on when the adverse event occurred.
What is considered adverse credit in the UK? What are the types of adverse credit?
There are several different ones out there including CCJs, IVAs, Defaults and Debt Management Plans. Late payments also come up fairly regularly.
In this day and age we also see high credit utilisation, which is not a form of adverse credit as such, but it can lead to lenders being more wary of lending to an individual.
When you have your meeting with us here at Smiths Financial, we’ll review your credit report with you and discuss the best steps towards getting you a mortgage.
What if I’m a First Time Buyer and have adverse credit? Can I still get a mortgage?
Yes, it’s possible to be both a First Time Buyer with adverse credit and still get a mortgage. It can depend on when the adverse credit occurred, and whether there are any amounts outstanding – such as unsatisfied Defaults or CCJs.
It can also depend on the deposit that you have available. As I mentioned earlier, some adverse lenders require a larger deposit than high street lenders – maybe 10% or 15% deposit.
If you’re a First Time Buyer and you’ve got adverse credit, reach out to us here at Smiths Financial and we will review your circumstances. We’ll work with you to achieve your needs and requirements in purchasing a property.
We would look at your credit report with you, and conduct an affordability assessment with the lenders that may be able to help with your credit situation. We work with you to achieve the best possible outcome for your mortgage needs.
Do I need a larger deposit for a mortgage with adverse credit?
Obviously there are 5% deposit mortgages available for many First Time Buyers. Some lenders are willing to take a view on clients with adverse credit events in the background.
But you will have more options with a bigger deposit. We would discuss this with you as part of our application process and fact-find conversation. That’s where we get to know you as an individual and your circumstances.
We would use that information to fully explore the potential lenders for your adverse credit, and whether a higher deposit is possible. So reach out to us to explore the possibilities.
Can you remortgage with adverse credit?
Yes, it’s possible to remortgage with adverse credit. It’s not too different from being a First Time Buyer in terms of the mortgage process. The lenders and products that are available will depend on when the adverse credit occurred.
If it’s a recent CCJ, for example, you may pay a higher rate than with a CCJ that was registered over three years ago.
More lenders do become available if the adverse credit was over 3 years ago, but we do have lenders available for all circumstances.
We’ll discuss this with you and look at all the available options for your remortgage. If you’re potentially looking for some additional borrowing, we would need to review the adverse credit and see what’s improved. We would explore any alternative lenders as well as the option to remain with your existing lender.
Reach out to us here at Smiths Financial and we can discuss your remortgaging needs. If you’ve got adverse credit, we can take that on board as well.
Speak To an Expert
Can I get a Buy to Let mortgage with adverse credit?
Yes, it’s possible to get a Buy to Let mortgage with adverse credit. It can depend on when the adverse credit event occurred. If it’s more recent, then you may have to pay a higher rate than if it occurred a few years ago.
Lenders could have different products depending on when the adverse credit was registered on your file. The more recent it was, the higher the rate it is likely to be.
If it’s a recent CCJ, for example, you may pay a higher rate than with a CCJ that was registered over three years ago.
More lenders do become available if the adverse credit was over 3 years ago, but we do have lenders available for all circumstances.
You can speak with us here at Smiths Financial to review your Buy to Let needs – we’ll go through all the available options with you.
Do I need a guarantor for a mortgage if I have adverse credit?
It will come down to your individual circumstances and affordability. In some instances a guarantor can be added to a mortgage where the main applicant has adverse credit.
We would discuss this with both the guarantor and the applicant. We’d review the options available along with your needs and circumstances. We make sure that the mortgage works both from the guarantor’s and the applicant’s perspectives. We work through the requirements and what you would need to make that possible.
If that’s something you’re looking to do, just get in touch with us here at Smiths Financial to discuss it further.
How long do I have to wait after improving my credit score before applying for a mortgage when I’ve had adverse credit?
Whenever we’re reviewing mortgage options, we look at your credit report to see when Defaults, Late Payments or CCJs were registered, and when they will actually fall off the credit report.
It’s purely part of our research in terms of which lenders are available. Some might want three years to have passed after a Default, or a certain amount of time following a Default being satisfied.
We make notes on that, and if it transpires that we’re unable to apply for a mortgage at that time, we’ve got the information to confirm how long we will need to wait before that adverse item drops off the credit report. We explain when you should come back to us with up-to-date documents, for us to take it further.
Having said all that, it could well be that you don’t have to wait. So if you’re a First Time Buyer looking at your credit report and you’ve got that sinking feeling, just get in touch with us.
There could be lenders and products available out there right now to potentially help. It’s worth reaching out to us for a chat, to see what’s possible for you.
How can a mortgage broker help here? Have you got anything else you’d like to add?
When it comes to adverse lending, it’s definitely helpful to have a broker by your side. Not only do we have access to a whole array of different lenders out there, we can go to each and every one of them with your needs and circumstances. We communicate with those lenders directly about your case.
The role of a mortgage broker is really to put you in the best possible light in front of the lender. We work with the lender and the client to achieve a successful outcome.
So if you do have adverse credit, or if there’s anything that you’re unsure about, reach out to us. We’ll look to help you to achieve your dream of home ownership.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.