Bad Credit Mortgages

If you have had problems with your credit in the past, for example, you may have missed a credit card payment or you have a County Court Judgment against your name, you may have even been made bankrupt all these factors will have had an adverse effect on your credit.

About your mortgage

Error: Yearly income income must be between £1 and £10,000,000.

Error: Regular bonus must be between £1 and £10,000,000.

Based on your yearly income, you may be able to borrow:

£0

Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

£0

Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

Bad Credit Mortgages

If you have been turned down for a mortgage due to bad credit, or need help submitting a mortgage application, the Revolution team is here to help.

Bad credit is not uncommon, and can be for any number of reasons - perhaps you have had a property repossesses, or had arrears on your mortgage payments in the past.

While bad credit does make getting a mortgage more difficult, you can still secure competitive lending by working with a specialist bad credit mortgage broker.

Revolution Finance Brokers works with a network of respected lenders who have flexible products to support mortgage applicants in a range of bad credit scenarios.

If you need more information or support with your mortgage lending, give us a call on 0330 304 3040 or send us a message to info@revolutionbrokers.co.uk.

How Can You Get a Mortgage With Bad Credit?

Specialist lenders, who can accept applications from people who have a low credit score, or have issues with their credit rating, offer bad credit mortgages.

Sometimes this is the best option, although the rates and fees attached can be higher than available to applicants with a clean credit record.

Revolution Brokers often negotiate competitive deals for clients with bad credit - for example, by demonstrating affordability or applying for a lower loan-to-value (LTV) ratio through a higher deposit.

The right mortgage for you all depends on your circumstances, and lenders won't just look at your credit score but also factors such as:

  • Your age
  • The seriousness and date of the credit issues.
  • How stable your current financial position is.
  • The property in question.

What Does Bad Credit Mean?

Bad credit is a sweeping term and might apply to any number of scenarios. Generally, this means that someone has fallen behind or not kept up with repayments on credit agreements in the past.

This could range from being a few days late on a payment, to having fallen into arrears and not made repayments at all.

Your credit report collates information about your finances for the past six years, and if you have credit issues showing on the report, it can be challenging to find a mortgage provider who will lend to you.

Can I Get a Mortgage With Bad Credit History?

You can, yes, and while highstreet lenders might not be able to help, that doesn't mean that an experienced broker cannot find a great deal for you.

The right lender depends on lots of factors, including:

  • How severe your credit problems are.
  • How long credit issues have shown on your credit file.
  • How closely you meet the lenders' affordability and eligibility criteria.

Bad credit mortgage brokers work with clients in all sets of circumstances, and Revolution Brokers specialise in finding mortgage lenders who will be able to approve your application.

Which Mortgage Lenders Offer Bad Credit Products?

This sort of lender specialises in helping customers get mortgage borrowing, even when they have credit issues.

Many mainstream firms cannot help applicants who have had financial difficulties, and others will reject applications that fall outside of their lending policies.

Revolution Brokers work with respected lenders who support applications from:

  • First-time buyers who have bad credit or no credit history.
  • Applicants with low credit scores, or no score at all.
  • People who have suffered adverse credit issues in the past.

It is essential to work with a broker to apply to a bad credit mortgage provider since the rates on offer will usually be higher than for people with a healthy score.

However, if you have a reasonable deposit and can demonstrate reliable income, Revolution Brokers can negotiate terms and rates on your behalf.

How Does Mortgage Lender Assess Eligibility for Bad Credit Applicants?

Every lender is different, but all will consider two primary factors when deciding whether they can lend to an applicant with bad credit:

  • What adverse credit you have experienced and how serious it was. Missing a bill payment is, of course, much less serious than having been bankrupt, so a lender will want to check what happened and how much borrowing was involved.
  • How long ago, your credit issues occurred. Most credit checks for mortgage applications go back for six years. If your credit issues were at the start of this time and your finances have since recovered, the better terms you will achieve than if you have recently experienced severe credit problems.

If you have been bankrupt, you cannot apply for any mortgage until the bankruptcy has discharged, which is typically in a year. Many lenders will not consider lending to anybody who has been bankrupt for three to four years and will also need to see good credit history since.

The interest rates available for applicants who have had a property repossessed in the past are also much higher than for people with good credit.

That means the longer ago your credit issues, the better a deal you will be able to achieve.

Can I Get a Mortgage With Bad Credit From Any Lender?

All sorts of lenders provide bad credit mortgages, although the rates and criteria will vary significantly between them.

Even some high street banks offer bad credit mortgages - however, that doesn't mean to say that they will be as competitive as specialist lenders who support applicants with bad credit.

We have summarised some of the larger lenders and what scope they offer for lending against bad credit:

Applicants with mild credit issues:

Lender

Potential to lend?

Considers low credit score applicants?

Accepts people with late payment history?

Barclays

Depends on the credit score and deposit available.

Decided on a case-by-case basis.

Yes.

Halifax

Depends on the credit score and deposit available.

Decided on a case-by-case basis.

Yes.

NatWest

Depends on the circumstances.

Possibly and only if no arrears in the past year.

Yes.

HSBC

No.

No.

Yes.

Santander

Depends on the circumstances.

Possibly and only if no arrears in the past year.

No.

Virgin Money

No.

Possibly and only if no arrears in the past six months.

Yes.

Bluestone

Yes.

Possibly and only if no arrears in the past year.

Yes.

Accord Mortgages

Depends on the credit score and deposit available.

Possibly and only if no more than one missed payment in the last two years.

Yes.

Applicants with severe credit issues:

Lender

Payment defaults?

CCJs?

Debt management schemes?

IVAs?

Barclays

Up to £200 if now paid.

Up to £500 over 36 months ago.

Yes, if repaid.

Yes, if repaid after six years.

Halifax

Yes.

Yes.

Yes, if repaid.

Yes, if repaid after six years.

NatWest

Yes, if repaid.

Yes, if repaid.

Yes, if repaid.

Yes, if registered over six years ago.

HSBC

Yes, if over 36 months ago.

Yes, if over 36 months ago.

Yes, if repaid.

Yes, if repaid after three years.

Santander

Yes, after one year.

Yes, if repaid and over three months ago.

Yes.

No.

Virgin Money

Up to two if over six months ago.

Up to £2,000 if now repaid.

Up to £500.

Yes, if repaid.

Bluestone

Up to four in the last 36 months.

Up to three in the last 36 months.

Yes.

Yes, if repaid after three years.

Accord Mortgages

Up to £500.

Yes, if repaid after 36 months.

Yes, if repaid.

Yes, if repaid after six years.

Applicants with very severe credit issues:

Lender

Bankruptcy

Repossession

Debt management schemes?

Multiple issues?

Barclays

Yes if discharged over six years.

No.

Yes, if repaid.

Yes.

Halifax

Yes if discharged over five years.

Yes, after six years.

Yes, if repaid.

Yes.

NatWest

Yes if discharged over six years.

Yes, after six years.

Yes, if repaid.

Case-by-case basis.

HSBC

No.

No.

Yes, if repaid.

No.

Santander

No.

No.

Yes.

Yes.

Virgin Money

No.

No.

Up to £500.

Yes.

Bluestone

Yes if discharged over three years.

Yes, after two years.

Yes.

Yes.

Accord Mortgages

Yes if discharged over six years.

Yes, after six years.

Yes, if repaid.

Yes.

These are indicative rates on the last published tables and will be subject to changes and individual lender criteria.

For current rates and to select the best mortgage provider for your circumstances, give the Revolution team on 0330 304 3040.

Do Different Types of Credit Issues Make Getting a Mortgage With Bad Credit Harder?

Your chance of securing lending depends on how serious the adverse credit issues are. Less serious problems such as missing a phone bill are not going to have as much of an impact as a bankruptcy or property repossession.

Specialist lenders are more flexible when it comes to considering bad credit applicants, and can be the best option for applicants with a range of credit issues:

  • Low credit score or no credit history.
  • Late payments and missed mortgage repayments.
  • Defaults, CCJs and IVAs.
  • Debt management schemes.
  • Repossessions and bankruptcy.
  • Payday loan history.
  • A combination of multiple credit issues.

Mortgage lenders who are experienced in bad credit applicants will look at the reason for the issues, how serious they are, how long ago they occurred, and whether you meet other criteria outside of your credit file.

What Other Factors Impact My Mortgage Eligibility Aside from Credit History?

Your credit score is one of many factors a mortgage lender will consider. Other important areas include:

  • Employment status and income: regular employment and a higher salary all make it easier to borrow. If you are self-employed or have a non-regular income pattern, a specialist provider is more likely to be able to lend to you.
  • Deposit available. The higher the deposit, the better the terms offered - usually you'll need at least a 5% deposit for a residential property, and from 15% and above for a buy-to-let.
  • Your age. Some lenders have no age limits, whereas others will cap lending on applications over 75 or 85.
  • Expenses and outgoings. If you have other loans, debt, dependants or commitments, these will be used as part of the affordability calculation.
  • The value and type of property. The higher the value of the property against the mortgage requirement, the better. Non-standard properties such as those with a thatched roof or a timber frame are best mortgaged through a specialist lender.

How to Get a Mortgage With Bad Credit From a High Street Bank?

Possibly - some mainstream banks do offer bad credit mortgages, but often the rates and terms offered are less competitive than those from specialist bad credit lenders.

Below is an indicative summary of how long must typically have passed since your bad credit issues for a high street lender to be able to consider your application:

 

Up to One Year

1-2 Years

2-3 Years

3-4 Years

Over 4 Years

Missed payments

Yes.

Yes.

Yes.

Yes.

Yes.

Mortgage arrears

Yes - three maximum.

Yes.

Yes.

Yes.

Yes.

CCJs

Possibly - if a low LTV.

Possibly - if a low LTV.

Yes.

Yes.

Yes.

Defaults

Possibly - if a low LTV.

Possibly - if a low LTV.

Possibly - if a low LTV.

Yes.

Yes.

Debt management plans

Probably not.

Yes - depending on credit score.

Yes - depending on credit score.

Yes - depending on credit score.

Yes - depending on credit score.

IVAs

Probably not.

Possible with 25%+ deposit.

Possible with 20%+ deposit.

Possible with 20%+ deposit.

Possible with 10%+ deposit.

Bankruptcy

Probably not.

Possible with 25%+ deposit.

Possible with 15%+ deposit.

Possible with 5%+ deposit.

Possible with 5%+ deposit.

Repossession

Probably not.

Possible with 25%+ deposit.

Possible with 25%+ deposit.

Yes.

Yes.

These are rough indications of how likely a high street lender is to be able to consider an application within each timeframe of experiencing a bad credit problem. There is no assurance that a mainstream lender will consider or approve your application.

The best action in any of these scenarios is to work with an experienced bad debt mortgage broker who can recommend the best lenders for you.

Why Does My Salary Impact My Mortgage Application?

Mortgage terms and rates change frequently, so it is impossible to give average interest rates for a bad credit mortgage. However, if you have a low credit score, the interest rates likely offered will be higher.

The higher and more stable your salary, the easier it is to demonstrate affordability and assure a lender that you will be able to keep up with repayments.

High-income applicants - lenders usually offer a multiple of your annual salary. If you have bad credit, this can be difficult as no matter how much you earn, you are still considered a high-risk applicant.

It is therefore vital to apply to the right lenders who offer higher multiple salary calculations - some will lend up to 4.5 x your income, and others can lend as high as 6 x your salary.

Low-income applicants - the combination of a low income and bad credit means that you will need to use a specialist broker to find a competitive mortgage.

Niche lenders have different options to help you get the lending you need; such as having a guarantor in place, using benefit income to back-up the affordability calculation, or recommending a government scheme such as Shared Ownership.

You may be eligible for mortgages such as a Joint Owner Sole Proprietor mortgage, which is often an option for first-time buyers and means that a family member can help you purchase your home, without taking away any proportion of ownership.

How Can I Improve My Credit Rating?

There are lots of ways to improve your credit score, and if you've had issues in the past this is well worth doing as it may make a big difference to securing a mortgage, and the rates you are offered.

Here are some ways to improve your credit score:

  • Review your credit reports for errors. Most lenders use a credit referencing agency like Equifax, TransUnion or Experian, and you can usually access your credit report for free. If you find any out of date information, errors or inaccuracies you can query this and have your credit file updated.
  • Take out small amounts of borrowing. If you have no credit history, it can be as challenging to borrow as if you have unfavourable credit ratings. You can take out an adverse-specific credit card, borrow small amounts and repay the balance in full every month. Over a few months, this will improve your credit score.

Getting a Mortgage With Bad Credit UK and a Low Credit Score

You can, yes. Most lenders will run a credit check, but the importance of your credit score depends on their policy and how well you fit other criteria.

Specialist low credit lenders are usually more flexible, whereas traditional mortgage providers will leave it to their underwriter to decide whether they can make an offer.

Credit scores are calculated by combining information from the largest UK credit referencing agencies - Equifax, Experian and TransUnion. Each uses a different scoring system, so they are not easy to compare.

  • Equifax gives credit scores out of 700, with 475 and above 'excellent'.
  • Experian scores credit out of 900, with 700+ being 'good' and 800+ being 'excellent'.
  • TransUnion assigns a score out of 700, and then allocates a rating of 1-5, with five being outstanding.

Niche lenders are less interested in your credit score than in your credit history, and how well you have managed your finances since adverse credit issues.

Information Required When Applying for a Mortgage With Bad Credit

You will also need to provide information about your income, as this will not show on your credit file.

Some lenders can offer up to a 95% LTV, which means needing a 5% deposit. Others will offer a much lower LTV and thus require a higher deposit. 

Revolution Brokers work with specialist lenders who can even support applicants with zero credit scores, so there are always options no matter how severe your previous credit issues may have been.

In this case, the most critical factors will be around demonstrating you can afford to keep up with repayments and meet the lending criteria - and so it is essential to work with a broker who can help compile your application to meet these points.

Why Revolution Brokers?
  • Whole of market brokers

  • Mortgage that suits you

  • On time customer support

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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