Getting The Right Mortgage Advice...
Poor & Adverse Credit History Mortgages
The past can come back to haunt us - this is exactly how it is financially if we have had financial problems in the past.
Our process is simple, we offer an Initial FEE FREE consultation where we aim to understand your situation and circumstances. Following our consultation we will the research and tailor a recommendation that is right for you.
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Sometimes through no fault of our own, or sometimes due to our own making, we have run into financial difficulties which have caused problems not only at the time but even well after the problems are over, they have left us with tarnished and poor credit histories.
Can someone with bad credit get a mortgage? What can they do to help their situation? Below are some tips and pointers which may help individuals that have a less than favourable credit score and report.
Your home may be repossessed if you do not keep up repayments on your mortgage
As a result lenders will look at each application individually. Whilst it is true that some lenders will not tolerate negative or adverse credit, we have relationships with lenders that are more forgiving in reviewing individual circumstances to consider lending to those with a financially turbulent past.
Different lenders have different approaches and different tolerance levels regarding the severity of the defaults or situation and historical or current issues. What is most important is to fully understand the situation before you start making applications, and to give 100% full disclosure before trying to pursue a mortgage.
It is not uncommon for people to try and bury their head in the sand and to not mention past problems thinking that they might go uncovered. The importance of full and honest disclosure is paramount in the likelihood of being able to obtain a mortgage with a difficult credit history.
The chances are if anything is not disclosed and is hidden from the start, it will get uncovered later on in the process. Lenders do not like this, and treat it as dishonest. If a lender finds an applicant has not been honest and given full disclosure they will most likely stop any enquiry, and refuse to look at the case. They could potentially also blacklist the individual and never consider lending to them again in the future.
As you can see it is best to be honest and upfront. That way the broker and the lender know what they are working with and can try to find a solution from the beginning. Alternatively you run the risk of making your situation potentially much worse, and cutting off a potential lender which could have otherwise helped you get the mortgage you are looking for.
The first thing you should do is get a copy of your credit file. This will outline all of the issues in your credit history which will be relevant to your mortgage application. If you have any credit issues, show this file to your broker and he can help work with you through the issues and advise the likelihood outcomes of an application and any steps necessary to take to get you there.
There are several main credit reference agencies, and different lenders use different agencies. It is therefore a good idea to check all the different agencies to see what they all have on your file. Some may hold information that others do not.
You can get a copy of your statutory credit report for £2, however most agencies will give you free access now and give you your score for free. Or you can sign up for a 30 day free trial to get a copy, just make sure to cancel if you don't want to continue the membership.
Ensure that you pay all of your bills on time and in full. When you miss payments or don't pay the full amount the credit or service provider will contact the credit reference company and inform them. This is not a proactive approach it is done automatically if your accounts go into arrears or default, so don't think missing one month's payment won't hurt because it will be recorded and can reduce your credit score and cause problems for mortgage and other credit applications.
If you have any credit card accounts that are not being used, consider whether you need to keep them open. Too many accounts that are not being used could have a negative effect on your credit score.
There are some credit cards that are designed specifically to help you improve your credit rating. They start with low limits and are designed for you to arrange to repay the full amount each month, this will improve your credit score over time.
Having long standing credit accounts can also increase your credit score, providing these accounts are well managed and always paid up to date as your credit agreement.
Sometimes there can be erroneous information on your credit file which may be inaccurate or out of date. You can write to the credit reference agency and ask them to make a correction to their records. You will need to supply as much evidence as you can to illustrate that there is an error. The credit reference agency will then liaise with the credit provider to verify the mistake and information. Or alternatively they will supply you the correct contact details of the relevant department with the credit provider, and you can then contact directly to rectify the mistake. The credit provider will then in turn update the information they provide to the credit reference agency if the mistake has been upheld.
Whilst there are no guarantees that these principles will help to improve your credit rating they are all recommended steps one should take to ensure they are doing what they can and actively trying to improve their credit score. The stronger your credit file, the better chance you will have of a mortgage provider consider your mortgage application.
How To Get A Mortgage With Bad Credit
The process to get a mortgage if you have a bad credit is the same as any other mortgage application. You can get in touch with us today and we can discuss what you are looking for and the next steps of how we can help you.
There is an initial consultation where we review all of your circumstances and find out exactly what you are trying to achieve, so that we can devise a plan and a strategy of what to do moving forward. We then research the market and begin speaking with lenders to gauge their appetite for lending on the facts and merits of the case. Once we have concluded our research and work on your behalf we will advise on the next steps and give a recommendation as to what you should do based on your situation.
If we can recommend a product for you despite the poor credit score or record then it is likely it will have higher charges and interest rates associated which are dictated by the lender. These higher charges are likely to be due to their increased risk of lending to someone that has had problems in the past.
After managing this situation successfully for a while, we will continue to work with you to ensure that once your credit file becomes healthier and you develop proven track record as circumstances change. We then help to assist you in moving onto products that are more appropriate to your new situation and that may have consequentially lower costs and interest.
Credit Issues We Work With
There are many different credit problems and defaults which will affect your credit score. By checking your credit file you will see which, if any, are impacting you. Different problems have differing degrees of severity and will need individual advice for each one. Credit problems include but are not limited to:
County Court Judgements (CCJs)
Debt Management Plan (IVA's)
Missed Credit Card, Loan, Mortgage Payments
Unpaid Bills, Phone Contracts, Council Tax etc.
We can help work with you if you have any credit problems. If you are not in a position to go to full mortgage application now, we can advise and assist you along the way to help you put the situation right and be in a position to go to get ready to apply.
Get in touch today to discuss your situation and find out how we can help.