How to Secure a Bad Credit Buy to Let Mortgage

The in-depth guide to applying for a buy to let mortgage with bad credit – what rental mortgage lenders will look for in your application and how to find the best deal available.

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.

£0

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.

How to Secure a Bad Credit Buy to Let Mortgage

Buy to let mortgages or remortgages are doubtless more challenging to come by if you have an adverse credit history to factor in.

However, there are specialist bad credit lenders out there, and you might be surprised at how many mortgage lenders’ criteria you fit, depending on the anticipated rental revenue from your investment!

For more assistance with bad credit but to let mortgages, give the Revolution Brokers team a ring on 0330 304 3040, or drop us a message at info@revolutionbrokers.co.uk.

Can I Get a Buy to Let Mortgage UK Bad Credit Rating?

Quite possibly, yes. There are hundreds of buy to let lenders, from high street banks to specialist providers. Most lenders will decide based on what sort of credit issues you have had and when they occurred.

Working with an independent broker to avoid making rejected applications and racking up more hard searches on your credit file is vital.

Can I Mortgage or Remortgage Buy to Let With Bad Credit Due to a Low Credit Score?

Low credit scores and a bad credit score are two very different things. The challenge is to ensure that you apply to a lender whose eligibility criteria you can meet. Many high street banks rely heavily on generic credit scores, whereas niche lenders are often more interested in your general financial conduct.

A low score usually means that you haven't ever taken out credit borrowing or haven't registered on the electoral roll.

Bad credit means that you haven't kept up with your debt repayments at some point. If you're not sure of your credit rating, it's very wise to access a copy of your credit file and ensure it is all up to date and accurate.

Credit reports show:

  • All of your accounts with credit borrowing, from mortgages to mobile phone contracts.
  • Any recorded court action taken against you, such as a CCJ.
  • Searches run on your credit file.

What are the Buy to Let Mortgage Options for Different Types of Credit Issues?

Your chances of approval will depend on what sort of credit problems you have experienced. Some lenders will disregard minor issues, whereas others will automatically reject any applicant with a credit score below a threshold, so it's crucial to evaluate your situation before making any applications.

  • Late payments are not uncommon. While some lenders will decline any applicant with a missed payment, most providers will consider offering competitive interest rates. One or two isolated late payments are a much less serious issue than having multiple late payments in the last few months.
  • Mortgage arrears arise when you owe more than this month's repayments. In most cases, arrears are treated like a missed payment, although serious arrears are more complicated. Many landlords fall into arrears when a rental property is vacant, so if you can appoint a broker to explain the cause, you're more likely to be successful.
  • Defaults mean that you have missed between three and six payments and issued a formal letter of demand. You can still get a BTL mortgage in this scenario, depending on how many defaults you have had, when, and for what value.
  • CCJs are more serious again, and as with defaults, the lender will consider when, why and how the CCJ occurred before deciding whether or not to lend. Having a CCJ several years ago due to expire from your credit report soon is a much easier scenario than having one registered in the last few months.
  • Debt Management Plans are a way for people to get their debts back under control. Some lenders will refuse any landlord with a DMP history since it can represent poor financial management. Still, some mortgage providers will consider applicants with a DMP, depending on how many, when they occurred and if all the DMP repayments have been made on time.
  • IVAs (individual voluntary arrangements) are another debt management tool that can impact your eligibility for a buy to let mortgage. There are bad credit lenders who can help, but you might require a higher deposit and will likely be quoted more expensive interest rates.
  • Bankruptcy means that you must work with an independent broker to have a BTL mortgage approval chance. If this has been discharged, and your broker can make your case and negotiate with the lender, it may be possible to find a buy to let mortgage.
  • Repossessions can make it very difficult to find any mortgage since, in the past, you have failed to make repayments to the extent that the lender has to sell the property to recoup their losses. Even in this situation, you might be successful if the repossession was some time ago, and you can create a compelling application.

Finding a Buy to Let Mortgage Bad Credit Late Payments

Late payments are not uncommon.

While some lenders will decline any applicant with a missed payment, most providers will consider offering competitive interest rates.

One or two isolated late payments are a much less serious issue than having multiple late payments in the last few months.

Can I Get a Buy to Let Bad Credit Mortgage With Arrears History?

Mortgage arrears arise when you owe more than this month's repayments.

In most cases, arrears are treated like a missed payment, although serious arrears are more complicated.

Many landlords fall into arrears when a rental property is vacant, so if you can appoint a broker to explain the cause, you're more likely to be successful.

Bad Credit Buy to Let Mortgages With Defaults

Defaults mean that you have missed between three and six payments and issued a formal letter of demand.

In this scenario, you can still get a BTL mortgage, depending on how many defaults you have had, when, and for what value.

Getting a Buy to Let Mortgage With Bad Credit CCJs

CCJs are more serious again. As with defaults, the lender will consider when, why and how the CCJ occurred before deciding whether to lend.

Having a CCJ several years ago due to expire from your credit report soon is a much easier scenario than having one registered in the last few months.

Buy to Let Mortgage Bad Credit DMPs

Debt Management Plans are a way for people to get their debts back under control.

Some lenders will refuse any landlord with a DMP history since it can represent poor financial management.

Still, some mortgage providers will consider applicants with a DMP. That depends on how many, when they occurred and if all the DMP repayments have been made on time.

Buy to Let Bad Credit Mortgages With an IVA

IVAs (individual voluntary arrangements) are another debt management tool that can impact your eligibility for a buy to let mortgage.

Bad credit lenders can help, but you might require a higher deposit and will likely be quoted more expensive interest rates.

Getting a Bad Credit Buy to Let Mortgage After Bankruptcy

Bankruptcy means that you must work with an independent broker to have a BTL mortgage approval chance.

If this has been discharged, and your broker can make your case and negotiate with the lender, it may be possible to find a buy to let mortgage.

Buy to Let Mortgage UK Bad Credit Repossessions

Repossessions can make it very difficult to find any mortgage since, in the past, you have failed to make repayments to the extent that the lender has to sell the property to recoup their losses.

Even in this situation, you might be successful if the repossession was some time ago, and you can create a compelling application.

Criteria for Getting a Buy to Let Mortgage With Bad Credit

Each lender will rely on their policies and criteria to decide whether they can consider a buy to let mortgage applicant with a bad credit history.

  • Affordability on buy to let mortgages looks at how much rent the investment will generate. Most lenders need this to be 125% to 145% of the monthly mortgage interest, depending on which tax bracket you are in.
  • Your deposit will typically need to be from 15% as a minimum - but is likely to be higher in a bad credit scenario.
  • Lenders may also assess your age, with some having caps, usually around 85, on the upper limit of applicants they will accept.

Professional Help with Bad Credit Buy to Let Mortgages UK

Suppose you want to mortgage a buy to let with healthy rental returns and can demonstrate your commitment to keeping the mortgage in check. In that case, it is usually possible to find a suitable provider, depending on the credit issues in question.

For an independent assessment and tailored advice to help you find the right mortgage lender for you, give the mortgage brokers team a call on 0330 304 3040 or drop us an email at info@revolutionbrokers.co.uk.

Why Revolution Brokers?
  • Whole of market brokers

  • Mortgage that suits you

  • On time customer support

Further Reading

Latest Blogs

11 Mar 2022
Guide to Remortgaging to Finance a Home Renovation

Remortgaging your home is a great way to release equity and raise finance for those home improvement jobs you've always wanted to do. Before applying, it's vital to work out how much equity you have in your property and ensure sufficient capacity to borrow the funds required for the renovation you have in mind. In today's article, t..

10 Feb 2022
Do I Qualify for First-Time Buyer Status?

Do I Qualify for First-Time Buyer Status? Working out whether or not you are a first time buyer may seem obvious - but there are plenty of scenarios where your position isn't clear! Examples might include: New buyers who have inherited a property they rent out. Buy-to-let investors that have never purchased a residential hom..

26 Jan 2022
How Does a Remortgage Application Work?

Most homeowners know that remortgaging means switching a mortgage from an existing lender over to a new deal. However, the process isn't always obvious. If you're on a fixed-rate deal, you'll want to get ahead of the end of the term to avoid being shuffled onto a higher standard variable rate where your interest costs will undoubtedly ..

17 Dec 2021
Understanding Lender Risk on First-Time Buyer Mortgages

Finding a great mortgage as a first time buyer can feel like an uphill struggle, with a larger proportion of applicants being turned down than a year ago. Around 20% of first-time mortgage applicants are rejected, usually because of the lender risk associated with their loan. Today, Revolution Brokers explains the highest risk facto..

28 Oct 2021
Pros and Cons of First Time Buyer Buy to Let Mortgages

Investing in a rental property can be an excellent way to get onto the property ladder and earn an income. However, if you haven't owned a residence before, you might find that a mainstream bank will automatically turn you down for a buy to let mortgage. In today's guide, the Revolution Brokers team explains how you can become a ren..

12 Oct 2021
Mortgage Deposit Requirements for First-Time Buyers

Buying a home for the first time is a massive step - but the deposit is often a stumbling block for first-time buyers. It can take years to save a sufficient amount or be impossible, so there are several ways to approach the problem and get your foot onto the property ladder. From April 2021, the UK government launched the new mortg..

Offer!

Refer, Relax and get £50

If you refer a friend for a mortgage or any
type of finance you’ll both receive £25
each when their new application
successfully completes.

Know More!

We are proud
members of the:

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.

Ask the Mortgage Experts

Revolution Brokers understands that mortgages can be complex and confusing!

Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.