Joint Mortgage with Bad Credit
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Joint Mortgage with Bad Credit
Can you get a joint mortgage if both or one applicant has bad credit?
Yes, it is possible to get a joint mortgage where there is bad credit on one or both credit reports. To overcome the challenge of bad credit to attain a mortgage, it’s best to speak with an advisor.
Talk to us here at Smiths Financial – we can take a look into your credit report and advise on the right lender for your needs and circumstances.
What types of bad credit affect a joint mortgage application?
There are several different types of bad credit, including county court judgements (CCJs), individual voluntary arrangements (IVAs), defaults and debt management plans. Late payments also come up fairly regularly.
A lot can depend on when the adverse credit occurred. If a CCJ is recent, for example, it can impact the lenders and the products that are available. We also see high credit utilisation, which is not adverse credit as such, but it can mean lenders are more wary of lending.
When you meet with us here at Smiths Financial, we’ll review your credit report with you and discuss the best steps towards getting you a mortgage.
Are there specific lenders for joint mortgages with bad credit?
Every lender has criteria around what they accept when it comes to bad credit, and we will research the right one for you.
The products can vary depending on when the adverse event was registered. I would recommend reaching out to us here at Smiths Financial to discuss your requirements – we can research the right lender to meet those needs.
Some lenders may also accept as little as 5% deposit. Others may require 10% to 15%, depending on when the adverse event occurred.
How can a CCJ affect a joint mortgage application?
If it’s a recent CCJ, you may pay a higher rate than with a CCJ that was registered a few years ago. More lenders become available once three years have passed since the adverse credit event, but we do have lenders available for all circumstances.
Satisfying a CCJ can also help. Some lenders may take this into account with affordability – for example, if there is a payment plan in place to repay the CCJ.
What effect can an IVA have?
IVAs generally stay on your credit file for six years, and lenders would require a set amount of time to have passed since being discharged.
Some lenders are happy to wait two or three years since the discharge date, whereas others are fine, once it comes off the credit report. It can be subject to credit scoring, though.
When you have your meeting with us here at Smiths Financial, we’ll review your credit report with you and discuss the best way forward.
What about a default?
Whenever we’re reviewing mortgage options for our clients, we look at your credit report to see when defaults were registered and when they will fall off your credit file.
It’s part of our research into the lenders available. Some might want three years to have passed after a default, or a certain time following it being satisfied – or they may want a bigger deposit.
Meanwhile other lenders will accept an unsatisfied default – or even disregard some defaults, such as those with utility companies or communications suppliers.
With defaults on your credit report, you can still get a mortgage, so it’s worth us reviewing it and looking for lenders that will suit your needs. It could well be that you don’t have to wait. There could be lenders and products available out there right now to help you.
Will a debt management plan stop me getting a mortgage?
Debt management plans are acceptable to some lenders and not to others. As part of our research, we’ll look to see which lenders will take a positive view on debt management plans for you.
Some may seek evidence that the DMP has been satisfactorily complied with for the past 12 months or so. It’s worth holding on to any statements that show you’ve made those payments.
Some lenders will also consider a previous DMP that’s been satisfied for 12 months. Each lender has their own individual criteria around this, so we will be able to advise further.
Does being married make a difference when applying for a joint mortgage with bad credit?
Every situation is different. We will run the affordability on both parties involved, and research the right lender for you. In some cases, married clients may wish to do a sole application because their partner has a high level of adverse credit.
Some lenders do prefer a joint application where there is adverse credit involved, however we do work with lenders that would accept a sole application.
We would research this for you and see what’s possible. Speak to us and we’ll advise you accordingly.
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Can I still get a joint mortgage if I’ve had previous bankruptcy or repossession?
Yes, but it will depend on the time since the event passed. We can research that for you. Some lenders are fine with previous bankruptcy.
Generally, you have more options in the lenders available once you reach three years since the discharge date of the bankruptcy. Some lenders will accept less time, while others need longer.
It also depends what sort of deposit you have available, and what the Loan to Value of the property is. We’ll review the circumstances and see which lenders are out there for you.
What if I’ve been declined for a mortgage with bad credit previously?
As part of our process, we’ll look at the reasons why that may have happened. There may be a lender out there for you, or there may be some steps to take before you reapply.
Don’t give up at the first hurdle. You can always try again.
What if I’m a First Time Buyer and have bad credit? Will this affect me getting a joint mortgage?
It’s possible to be a First Time Buyer with adverse credit on a joint application and still get a mortgage.
It can depend on when the adverse credit occurred and whether anything is outstanding, such as unsatisfied defaults or CCJs. It can also depend on the deposit you have available. Some adverse lenders do require a larger deposit than high street lenders, at around 10% or 15%.
If you’re a First Time Buyer with adverse credit, reach out to us here. We’ll work with you to achieve your requirements in purchasing a property. We would look at your credit report and conduct an affordability assessment with the appropriate lenders.
We’ll aim to get you the best possible outcome for your mortgage needs.
Do we need a larger deposit for a joint mortgage with bad credit?
Some lenders do require a larger deposit at 10% or 15%. But some lenders will still accept 5%. It depends on when the bad credit occurred, and the affordability calculations with the lender.
What is the minimum credit score required for a joint mortgage with bad credit?
Credit score is purely an indicator of how well you’re managing your credit. It’s not necessarily a requirement.
Lenders are more interested in what’s within the report – such as defaults, late payments, CCJs and so on. When you speak to us here at Smiths Financial, we’ll take a look at the credit report and advise you as to the best possible mortgage options.
Can we use a guarantor for a joint mortgage with bad credit?
It is possible to get guarantor mortgages. As part of our services, we’ll discuss all the options available to you and advise accordingly. The adverse credit could potentially limit the lenders you could approach for a guarantor mortgage.
This type of mortgage is also known as Joint Borrower Sole Proprietor. Speak to us here at Smiths Financial for more information.
How long do I have to wait after improving my credit score before applying for a joint mortgage?
We’ll review your credit file and advise you as to the best possible timeframe – and if you do in fact need to wait.
Any updates to your credit score can take up to 90 days to be actioned and reflected on your credit report. There are also different credit referencing agencies that lenders may or may not use.
We’ll always research the lenders that can assist you, to achieve the best possible mortgage outcome.
What else do we need to know about joint mortgages with bad credit?
When you download your credit report and see something there you weren’t expecting, it’s definitely helpful to have a broker by your side. It’s our role to put you in the best possible light in front of the lender.
We work with both the lender and yourselves to achieve a positive outcome. With adverse credit, there can be a lot of research involved, and a broker would work to get you the best possible deal.
If you do have adverse credit or if there’s anything you’re unsure about, reach out to us here at Smiths Financial. We’ll help you achieve your dream of home ownership.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.