Bad Credit Mortgages
If you have a Bad or Poor credit profile, are a discharged Bankrupt or have been in an IVA or Debt Management and you need a mortgage, you have landed on exactly the right page. Why? Because it is what we specialise in, and we are very good at what we do. We spend a massive amount of our time talking to lenders who are prepared to help, and they want to lend where they can. We have had a number of new lenders come to the market in 2017, all bringing new products and flexible criteria to a fast changing market, where we have need real competition with lenders looking to keep their market share. The current market offers a new and fresh outlook on the specialist mortgage market, which can only be good for prospective clients looking for a mortgage. We are here to help you when other lenders may have said no, call us now on 03452 605506 or 07867 794837
What makes us different?
We are special because we know our market and our lenders trust us because we are totally honest and transparent with them from day one. We are not time wasters. We make no upfront charges, so if we cannot help you we will tell you as soon as possible. Our business model is that we want to see everything from you upfront, your credit file and any information that will have an impact on your application. If we can see very early on what the lender will see when looking at you, we are in the driving seat, and we can, if at all possible take you to the right lender who will say YES on the most competitive terms. With over 50 years of experience in Financial Services we have the knowledge and the training to be able to help you, when others may say ‘NO’.
Yes, we can help you if you have been discharged from a BO or an IVA, the more historical the discharge, the more lenders we can talk to about your application. You may need a larger deposit than the average client, but three years after discharge we can offer you High Street terms.
Our business model is that we want to see everything from you upfront, your credit file and any information that may have an impact on your application. The most important question being, why did you go into bankruptcy or an IVA? What lenders understand is an event beyond your control. If we can see very early on what the lender will see, we are in the driving seat and we can, if at all possible, take you to the right lender who will say ‘YES’ on the most competitive terms.
Give us a call, we speak in plain English and do not make promises that we cannot keep. If we cannot help you, we do not get paid, so as you will appreciate it is not in our interest, or yours, to waste your time. But if we can see a way of helping you we will fight all the way to make it happen, and we just hate to say ‘NO’. Call us now on 03452 605506 or 07867 794837 we are here to help YOU
Mortgages with Adverse Credit
A great many clients are still being turned down by our High Street lenders for what in most cases turns out to be historical minor adverse credit, which in 99% of cases will mean that they will fail the credit score.However, do not despair, all is not lost. There are lenders out there who do not base their decision on how many points you score. They will credit check, as every lender does, but the decision to lend or not is made by a human being, yes that is right, a person (an Underwriter) will decide, not the computer. If you are in any doubt about your current credit status then you should obtain a copy of your credit file from one of the main credit agencies, Experian, Equifax, or Call Credit which you can now access for a one off payment of £2.
When we know exactly what Bad credit you have registered against you, when it was registered, the amounts involved, and if it has been satisfied, we can then give you an accurate assessment of your mortgage potential, without having to carry out a credit check, which will have a very negative impact on your credit score. We have lenders who will accept Bad and Adverse Credit, they may need a slightly larger deposit, 15-25%, and they may charge a bit more than some of the more recognised lenders, but they are there to help you and they want to lend, unlike the majority of the High Street lenders who are just cherry picking and trying to maximise their profitability on the business they write.
We have built up, over many years, a unique understanding of the Bad Credit market and the lenders who will help us, with clients who may have had an historical credit problem that is now in the past, and the clients have tried hard to rebuild their credibility. So do not give up if you have been unlucky and have been turned down by a mortgage lender, talk to us. We will explain in plain English what we can do for you, and if we place your mortgage, our key facts illustration ( KFI ) will set out in very clear terms all of the costs of arranging the mortgage and the actual repayments based on the chosen product.
There are various circumstances which people may find themselves in when applying for a mortgage. Some of these include:
- Mortgages for Self Employed
- First Time Buyer Mortgage
- Agency Worker Mortgage
- Mortgages for Discharged Bankrupt
- Refused a Mortgage Elsewhere
We can help you if you are in any variety of situations, the most frequent being a declined decision elsewhere. If you have suffered CCJ’s, defaults, late payments, IVA’s or other credit problems then why not talk to us.
The overall cost for comparison is 5% APR. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
What We Specialise In
We are here to help clients who would struggle to place a mortgage with a High Street lender because they may have a history of late or missed payments, been in a Debt Management plan, discharged from Bankruptcy or an IVA. All of these events will have a very negative impact on your credit profile, which would result in a decline by most lenders. This is where we at A Mortgage 4 You are here to help you find the right lender who will accept a bad or poor credit profile
In our experience most clients who have had financial problems have had them as a result of an event beyond their control, such as being made redundant, the breakdown of a relationship, loss of a business, a death in the family, and many other circumstances. Some lenders will take a view of an event in your life which was beyond your control. You may have been irresponsible in your younger years, but now have your finances under control, and you are now looking to move forward with your life, having learnt from your previous mistakes. The good news is that there are still lenders out there who are willing to help, and we know who they are and work closely together with them to achieve the most competitive terms possible.
Our expertise is in bad credit mortgages. We spend a great deal of our time monitoring changes in the market place and lenders underwriting. We have seen a number of new lenders coming into the market this year, some of whom specialise in bad credit mortgages. This has brought some real competition to the mortgage market, which is very good news for clients because lenders have had to change their criteria to be more flexible, and make their terms more attractive.
How do you know if you have adverse credit?
If we, or a lender, run a decision or agreement in principle for you, it may have a negative impact on your credit score. Some lenders carry out a hard search when carrying out a decision in principle, which leaves a ‘hard footprint’ that is visible to other organisations who may access your credit file, whilst others just do a ‘soft search’ leaving a soft footprint, which only you can see.
How do I access my credit file?
There are three main credit agencies in the UK which are used by lenders, and all clients are entitled to obtain a statutory copy of their credit file, for a one off payment of £2, apart from Call Credit via Noddle which is currently free for life. The sites are listed below;
What is a bad credit mortgage?
A bad credit mortgage (also known as an adverse credit mortgage or a sub-prime mortgage), is underwritten slightly differently to a standard mortgage application, where the decision to lend or not always based on points scored.With a bad credit mortgage application, some lenders still credit score, but for the most part the actual decision to lend is much more of a manual one, with a credit scoring system to see which product you fit with.
Although from outset the interest rates and mortgage fees maybe marginally higher than for a standard mortgage, over time as payments are made on time, your credit rating will improve until it will be sufficiently repaired to apply for a standard mortgage with success.
Your credit score can improve by the following:
- Being on the electoral role
- Making sure not to have any late or missed payments on loans, credit cards or secured loans/mortgages.
- Closing any credit accounts that you do not use
- Checking your credit file regularly to make sure all the information is current and resolving any errors. (You will need to contact the relevant lenders)
- Making sure that you do not exceed more than 50% of any credit agreement
- Where possible pay off your credit cards each month
Bad credit mortgages for first time buyers
Bad credit mortgages for first time buyers do exist, and as previously explained, interest rates and fees may be marginally higher, as will deposits, depending on how adverse your credit rating is and the size of the deposit (Loan to value).
If you are a first time buyer, please get in touch with us. We use simple terms so that you thoroughly understand all the options available to you. We have access to lenders who offer bad credit mortgages for first time buyers that you will not find walking through the high street.
Whether you are a first time buyer, looking to move house or to re-mortgage, we will be delighted to assist you. Give one of our friendly team a call today on 03452 605506 to discuss your options.
Types of Bad Credit
What are the issues that will effect any lenders decision to lend.
• Late or missed payments on credit arrangements
• Mortgage arrears
• Defaults on credit arrangements
• Poor conduct of your bank account
• County Court Judgments ( CCJ’S )
• Previous repossession
• Individual voluntary arrangements.( IVA )
• Can you be found on the electoral roll( IVA )
• Debt management.
There are of course other factors that will influence most lenders;
• How long have you been in your current employment
• Is your employment permanent
• Are you on the electoral roll
• Are you servicing your current commitments in a satisfactory manner?
• Your age
• Type of employment
• Will your travelling expenses increase by moving
• Is the property construction going to raise any problems
Your credit history however is the main factor when it comes to Bad Credit mortgages and any adverse credit on your file will remain there for six years paid or not.
What do our lenders do that is different apart from the underwriting, well if they are going to accept what is a higher perceived risk, they will balance this by asking for a higher deposit, normally 20/25 % of the purchase price or valuation and you may find that the interest rate margin is slightly higher.
Each of our lenders who accept mortgage applications with an element of bad/adverse credit will want to know exactly when the problem occurred and when it was satisfied. The only way in which you can answer those questions is to obtain a copy of your statutory credit file from Experian at a cost of £2 payable by credit or debit card. Please log onto www.experian/statutoryfile.co.uk
By letting a competent broker view your file the response that you get will be 100% accurate and not a shot in the dark which could have an adverse effect on your credit score.
The actual interest rate and fees payable by the client will reflect upon the individual circumstances of that enquiry. Please ask for a personalised illustration.
I am a discharged Bankrupt, can I still get a mortgage?
Once you have been discharged from Bankruptcy for more than one year, we can offer you a mortgage, and each year thereafter it gets better.
I have credit defaults on my file, will this stop me from getting a mortgage?
Any defaults registered more than two years ago we will ignore satisfied or not, anything less than two years will be looked at on an individual basis.
I have had mortgage arrears on my current mortgage, can you still help me?
If they are more than two years old we will ignore them, under two years, the loan to value would have a bearing, and one in each year we might get accepted, but we would prefer them to be more than 24 months historical.
I am currently in an IVA, can I get a mortgage when I am discharged?
You will have to wait until 12 months after discharge before we can offer you a mortgage.
If I am still in Debt Management can I get a mortgage?
Yes you can, but we would be looking at 80% max LTV ( loan to value ) and when looking at affordability, we would have to take into account the full contractual payment unless you were clearing the debt prior to, or on completion.
I trade as a limited company, what will you accept as my income?
Most lenders require 3 years trading, some will accept two and the odd lender 1 year. All lenders will accept Salary plus Dividends, with the odd lender taking retained profit into account.
I am Self- Employed how do you view my income for mortgage purposes?
All lenders base their decision to lend on your net profit, with some looking at a projection and one years accounts plus your SA 302
Can I have more than one mortgage?
Yes you can have more than one mortgage, but only one will count as your principal residence, all of the other properties will be looked as Buy To Let or Holiday Lets.
If I have a Bad Credit profile, but have a mortgage with a High Street lender and want to consolidate my un-secured credit, and do not want to lose my existing mortgage on very favourable terms, what can I do?
You can consider a secured loan with very flexible underwriting to consolidate your debts, and when your credit profile has recovered, you can then re-mortgage onto more favourable terms.
What is making Buy To Let mortgages more difficult tp obtain?
There has always been a stress test on rental income to service the debt by a margin, which was normally based on the rental coverage at the pay rate. Now most lenders are using a stress rate of around 6%, which means some properties will fail the test, and you may have to put down a larger deposit if you still want to go ahead..
Can I raise money on a secured loan to purchase a holiday home?
You can raise money on a secured loan, or on a re-mortgage for any legal purpose, although lenders on a secured loan tend to be a bit more flexible.
What is the highest loan to value that I can achieve for a Buy To Let property?
For a first time landlord 75% LTV and for an experienced landlord 85% LTV on the basis that the property is acceptable to the lender and that the rental income meets the lenders stress test.
Can I still get a 100% Mortgage?
The answer to the question is yes, there are still two lenders in today’s market who will consider a 100% mortgage providing that you have a Guarantor that meets the lenders criteria
If I have a very Bad Credit Profile can I still get a mortgage?
Yes we maybe able to help you but the maximum loan to value would be 85% LTV. and in an ideal world all of the adverse would be more than 2 years old, with some exceptions.
I want to purchase my council property what is the maximum discount that I can expect to receive?
If you qualify for the maximum discount ( please check with the Local Authority what you may be entitled to ) it would be £77,900 across England, and in London Boroughs £103,000 ( as at April 2015 ) this will increase each year in April by the consumer price index ( CPI )
Can I still borrow 100% of the discounted purchase price to buy my Council House?
Yes you can still borrow 100% of the RTB purchase price subject to underwriting guidelines, and in certain circumstances you can borrow more for home improvements.
Do I have to be a home owner to be able to purchase a Buy To Let Property?
We do not have the choice of Whole of Market, but there are still lenders who will consider a BTL product for a non-home owner.
Can I rent out my existing property that I own on mortgage, and buy another one to live in?
You have two choices, you can re-mortgage your current property on to a Buy To Let Mortgage, or you can seek the consent of your existing lender to rent the property out on an AST basis, normally for an agreed period of time.
Do lenders still work on a multiple of our incomes to see what we can borrow on mortgage?
The mortgage market review came into force in April 2014 with a totally new way of calculating your mortgage potential. What you can now borrow is based on the lenders affordability calculator, which reflects on your lifestyle. If you are considering taking out a mortgage in the near future, check out a few lenders websites and see how they would consider you, you may get a shock. Lenders build into their calculator what they think may happen in the future regarding interest rates, and this will impact on your potential borrowing.
You should take a very good look at your current spending pattern and see where and how you can trim you spending. All lenders will base their decision to lend or not on your ability to service the debt, and your last three months Bank Statements will be looked at very closely, be warned.
Do all lenders credit score?
Most of what we call the High Street lenders base their decision to lend on credit scoring, if you get enough points it will be a yes, if not it will be a big NO.
Fortunately we still have a number of the smaller lenders who still operate a manual underwriting system, where commonsense still prevails, thank God, and from them you will get a fair hearing. We also have a few specialist lenders who will take a view based on what they see and the size of the deposit going down. The lower loan to value any lender is looking at, means less risk, which lenders love.
Can I add any of the fees onto my Mortgage?
This would depend very much on the product and whether you are purchasing or re-mortgaging. Some fees can be added and you should advise your broker or the lender from outset your preference. You will be given a KFI document which very sets out all of the fees, and the ones that can be added onto the mortgage.
Do I need a Solicitor to act for me?
Whether it is a purchase or a re-mortgage, you will need a Solicitor to act for you, and in most cases the lender. You should always check, as some lenders have a very strict panel of Solicitors that they will accept, and you could end with paying two lots of legal fees if you are not careful. In some cases you may get free legals as part of the product, it would be wise to check up front if there are any incentives with the mortgage product.