If you have a good credit score the maximum loan to value in today's market would be 90% LTV, and with a Bad Credit Score you have to accept that lenders will expect a little more from you if they are prepared to lend. With maybe one or two late payments on unsecured credit preferably not in the last twelve months we would expect to be able to get you up to 85% LTV, and you should expect to see an interest rate marginally higher than the high street lenders
When we are looking credit defaults and late or missed payments on unsecured debts the loan to value will drop down to no more than 80% LTV. We would normally expect the credit defaults to be at least two years historical, to be accepted. We can also accept CCJ's when they are two years old and it would help if they were satisfied and under £500.
With the larger CCJ's and Credit Defaults we want them to be at least three years historical and again if they are satisfied it helps our case. What we are trying to build is a picture that is constantly changing but the more BAD CREDIT that you have, the larger deposit you will have to find and the interest rate will reflect the higher risk that any lender is taking.
What lenders do not like is mortgage arrears or on any secured loan and will not entertain any application with arrears within the last 12 months. Outside of 12 months we would need to have a very good reason why the arrears occurred particularly if you are trying to borrow more money.
With previous mortgage arrears, bad credit and a poor payment profile, you could be looking at a maximum of 75% LTV or less depending upon all the circumstances.
With discharged Bankrupts and those who have been in an IVA or CVA, although our friends on the high street will still say we can help you subject to credit score, what they should say is it would be very very unlikely that we can help you because the credit scoring is so tight that you will fail. So what can we do? If you have just been discharged 50% LTV is the maximum in this market with interest rates around the 8.56% , a typical interest rate would be 8.3% APR.
If you have been discharged for at least three years and have a good credit record since discharge, 75% LTV maybe possible with normal terms and conditions applying. The more historical your BAD CREDIT problems the easier it is to place your enquiry and the terms are likely to be less onerous.
We are also lucky to have built up some very good relationships with the smaller lenders who will take a view of BAD CREDIT if it is historical and the loan to value is below 60% LTV.
Whatever your BAD CREDIT history we may be able to help you, but the first thing that you should do is get access to your CREDIT FILE which you can now do for £2.Your credit file will show you exactly what the lender will see when they are considering your application, so it is very important that we know what the problem is in order that we can tell you with having a negative impact on your credit score which any credit search will have unless YOU DO IT.
In this very difficult market lenders are cherry picking the cases that they want to do and look for low risk and maximum earnings from each case. With Bad Credit Mortgages we do not have the same choices today as we had in 2007, but it is getting better very slowly and with new lenders coming to the market the competition will return and Bad Credit Mortgages will be easier to place and on better terms watch this space for news on Bad Credit Mortgage schemes.
