Bad Credit Mortgages – Things You May Not Know

Those of you with a poor credit history have become disheartened about one day having a mortgage of your own and qualifying for Bad Credit Mortgages can seem like a mine field. Perhaps this is because you’ve given up after so many setbacks. The truth is, because of the nature of the mortgage and property industry, its legislation and policies are forever evolving and changing. So, the last time you checked or applied, a lot may have changed. This means you may be more qualified than you think.

 

It all depends on a few key contributing factors:

 

Bad Credit Mortgages – how many credit issues do you have?

Each mortgage application is assessed differently, depending on the lender’s criteria and each application should be viewed as individual with each circumstance taken into consideration.

Obviously, if your history of missed payments and mounting debts is consistently bad, things are going to be tricky. If the total number of cases against your name shows you a history of frequent offences over a prolonged period, you will be seen as an extremely high risk to any lender. In this case, you can expect to be faced with higher interest rates and demands of a heftier deposit. Although, if it’s just the one isolated incident, due to a being made redundant or another personal life event, your case will be much stronger and more deals will be made available to you.

 

Bad Credit Mortgages – when were the credit issues registered?

Despite maybe having several credit issues against your name, the date in which these credit issues were registered may play an influential role in your mortgage approval and rates available.

If you have had a few defaults, and have previously been rejected for a mortgage, there does come a time when certain bad credit issues fall off the credit report. This can make you eligible, once again, for the best mortgage rates despite a bad credit history. However, some lenders do not abide by this rule at all.

Certain lenders will not touch you if you have ever filed for bankruptcy, despite of your current situation or even if it was a few decades ago. Whereas other lenders will consider most applications if the issues are 6 years or older. Some even consider bad credit mortgage applications for issues as young as 3 years old.

Using an experienced mortgage broker, who are in tune with the industry and the market, will be your best chance of success of securing a bad credit mortgage.

 

Bad Credit Mortgages – outstanding or settled?

Another major contributing factor to a bad credit mortgage application is whether or not your bad credit issues are settled or still active.

Whether you’ve had arrears, defaults or CCJs, as long as you’ve settled the debts, the rates available to you will be much better than if they’re still ongoing. If the debt is still active, lenders will see it as a direct complication into the ongoing monthly repayments of a mortgage. It would be advisable to clear all debts before beginning your bad credit mortgage application, to avoid the disappointment of minimal options and high rates. Having said that, there are some lenders who ignore settlement altogether, depending on when it was registered. Unless it’s bankruptcy or repossession, then they may be more inclined to reject the application.

 

Bad Credit Mortgages – strength of application

Even if you think you’ve dodged some of the above issues, you can make your bad credit mortgage application even stronger according to other aspects of your personal history.

For example, if you’ve lived in the same property for many years, your chances may improve. Moving around every other year shows an inconsistency and may be investigated further. Your work history can also play to your advantage. How long you’ve been there, the type of industry and regular income can all influence a potential mortgage rate. If a lender sees an unstable industry and frequency in job roles and salaries, they may view you as a higher risk.

 

Can you qualify for a mortgage with a bad credit history?

In short, yes. It’s not all doom and gloom just because you’ve had some issues in the past. Today, many lenders will assess you according to the latest legislation and under new criteria, meaning that some things are no longer viewed as impactive towards your mortgage application.

 

If it’s been some time since you last tried to secure a mortgage because of constant setbacks, and if you think you may have a strong case, speak to one of our friendly advisors today and to take the next step towards securing a Bad Credit mortgage.

Start your Bad Credit enquiry now.

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