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Mortgage Brokers for Applicants with Bad Credit

Mortgage Brokers for Applicants with Bad Credit

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Millions of people in the UK have a bad credit score or adverse credit issues. Whether you've had a CCJ in the past six years or missed a few payments at a difficult financial period, these can have an impact on your ability to obtain a mortgage.

As adverse credit specialists, Revolution Brokers work with clients to ensure that you get the bad credit mortgage you need, and apply only to those lenders we know are likely to be able to help.

For more support and advice, give us a call on 0330 304 3040 or drop us a message at info@revolutionbrokers.co.uk.

Which Mortgage Brokers Specialise in Bad Credit?

We do! As a mortgage broker, we help customers in all scenarios find the mortgage lending they need, and as a bad credit specialist have the knowledge to negotiate with the right lenders.

Bad credit makes getting a mortgage more complicated, but being well versed in the sector and with an extensive network of lenders, Revolution Brokers can help.

Mainstream lenders and highstreet banks are less likely to help the more complicated or extensive your bad credit issues are. As an independent broker, we have access to the whole of the market, including deals that are not available to the public.

Revolution specialises in supporting applicants looking for a mortgage whether they have:

  • No credit score or history.
  • Late payments or mortgage arrears.
  • Defaults and CCJs.
  • IVAs and debt management schemes.
  • Repossessions or bankruptcy.
  • A combination of multiple credit issues.

Why Use a Specialist Bad Credit Mortgage Broker?

Whether you have been rejected for a mortgage, or suspect that an application might be turned down due to previous credit issues, a specialist bad credit broker can assess your requirements and apply to the right lenders who they know will be able to accept your application.

That isn't just about having a network of specialist bad credit lenders, but about knowing the eligibility criteria of each, and identifying which you meet.

The right lenders to apply to depend on:

  • How severe your credit issues are.
  • When they occurred.
  • Other eligibility criteria.

If your credit issues are relatively moderate, say you have some credit card debt that will be repaid through a payment plan in the next three months, you have a wider pool of lenders to choose from.

More serious credit history with current or unsatisfied debt management plans will be more difficult to secure lending against.

It is common for a bad credit lender to ask for confirmation from your debt management provider that your account has been kept up to date for at least the last 12 months - depending on when the plan started.

How Can I Choose the Best Bad Credit Mortgage Broker?

Your broker is an essential part of the bad credit mortgage process and can help with every stage of your application, calculations and documentation.

Revolution Brokers are proud to offer a varied, diverse and personal service to every client:

  • Completely independent recommendations.
  • Access to the whole of the mortgage market.
  • Reasonable, transparent, and fair fee structures.
  • Access to exclusive offers and deals.
  • Commercial finance options.
  • Highly experienced in bad credit mortgages.

What not to look out for; if you come across a mortgage broker where any of the below apply, we would advise not to proceed:

  • Has a restricted number of lenders available.
  • Only offers their specific broker products.
  • Charges non-refundable fees, or large fees.
  • Does not have exclusive deals.
  • Is only interested in simple mortgage applications.
  • Doesn't have experience in the bad credit sector.
  • Only offers one or two insurance products.

Choosing a great broker can make an enormous difference to the rates you pay, how well you are looking after, and the long term viability and competitiveness of your mortgage terms.

If you are working with a broker and concerned about the service, contact Revolution on 0330 304 3040.

Who Can I Apply to For a Bad Credit Mortgage?

Many lenders will offer mortgages against a low credit score or to applicants with adverse credit history - but this all depends on their specific eligibility criteria, which will vary between every lender.

All mortgage lenders will need to run a credit check and tend to use one of the bigger UK credit reference agencies, or sometimes run reports with all three. Typically, these come from Experian, Equifax or TransUnion.

Each credit referencing agency uses a different scoring system and different definitions of good and bad credit. It is possible to get an excellent rate from one lender based on one credit report, and a low rate from another, who has used a different credit referencing agency.

As an example of the different credit assessment processes:

  • Nationwide use reports from all three leading credit reference agencies.
  • Coventry Building Society relies solely on Equifax reports.
  • Kensington does not use application scoring, but instead, leaves the risk assessment to their underwriters to decide each application on a case-by-case basis.

Can A Bad Credit Mortgage Lender Accept Any Types of Bad Credit?

The acceptable bad credit issues will depend on how serious they are, when they happened, and what the reason was.

Mild credit issues such as missing a phone bill payment won't have much impact, whereas something much more serious such as bankruptcy will very much limit the providers you can apply to.

If you have lots of credit issues, you might be asked for a higher deposit value, to pay higher interest rates, or to cover higher fees. Again, this all depends on the criteria of the lender in question.

An indication of what sort of bad credit issues mortgage lenders can accept, and how long needs to have passed since these issues for a lender to be able to consider your application, please see below:

Likelihood of achieving secured finance:

Bad credit issue

Likely to get a mortgage within 12 months?

Likely to get a mortgage after 1-2 years?

Likely to get a mortgage after 2-3 years?

Likely to get a mortgage after 3-4 years?

Likely to get a mortgage after four or more years?

Mortgage arrears

Yes, often a max of 3 arrears

Yes

Yes

Yes

Yes

CCJs

Probably not

Possibly, with a low LTV

Yes

Yes

Yes

Defaults

Probably not

Possibly, with a low LTV

Possibly, with a low LTV

Yes

Yes

Repossessions

Probably not

Possibly, with a 25%+ deposit

Possibly, with a 25%+ deposit

Yes

Yes

Likelihood of achieving unsecured finance:

Bad credit issue

Likely to get financing within 12 months?

Likely to get financing after 1-2 years?

Likely to get financing after 2-3 years?

Likely to get financing after 3-4 years?

Likely to get financing after four or more years?

 

Late payments

Yes

Yes

Yes

Yes

Yes

CCJs

Yes

Yes

Yes

Yes

Yes

Defaults

Yes

Yes

Yes

Yes

Yes

Debt management plan

Yes, depending on the credit file

Yes, depending on the credit file

Yes, depending on the credit file

Yes, depending on the credit file

Yes, depending on the credit file

IVAs

Possibly, with 25%+ deposit

Possibly, with 25%+ deposit

Possibly, with 20%+ deposit

Possibly, with 20%+ deposit

Possibly, with 10%+ deposit

Bankruptcy

Possibly, with 25%+ deposit

Possibly, with 25%+ deposit

Possibly, with 15%+ deposit

Possibly, with 5%+ deposit

Possibly, with 5%+ deposit

How Can a Broker Help If I Have No Deposit and Bad Credit?

If you have bad credit and no deposit - i.e. want to borrow 100% of the value of your property, it is possible to secure a no deposit mortgage. This is a specialist product and therefore very unlikely to be something you will be able to find without using a broker.

There are other options to help reduce the rates, for example, using a guarantor mortgage to lower the risk factor or use Help to Buy or Shared Ownership schemes.

What Fees Should I Expect to Pay a Bad Credit Mortgage Broker?

Fees vary depending on your requirements, what sort of mortgage you need, how complicated the application process is, and how much you wish to borrow.

As a very rough indication, a typical cost is around 3% of the loan value; although this cost is often quickly recovered by securing preferable interest rates and advantageous terms negotiated for you by your broker.

In some cases, the costs may be as low as 1%.

Will Using a Credit Repair Company make it Easier to Get a Mortgage?

It can, but it's always wise to seek expert support from an independent mortgage broker with experience in the bad credit market before deciding whether to work with a credit repair company.

Sometimes, these end up being very costly and are designed to earn the maximum in fees and interest charges, instead of being a cost-effective way to improve your credit score.

Independent brokers can help not only with finding a mortgage, but also in improving your credit score, understanding what it means, and identifying what the impact is in terms of finding the right lenders to apply to.

Some of the ways Revolution Brokers advise you help to rebuild your credit rating are:

  • Take out an adverse specific credit card to build up history if you have no previous borrowing.
  • Check copies of your credit files and report any errors or inaccuracies.
  • Register to vote on the Electoral Roll.
  • Keep up to date with all your regular payments and bills.
  • Do not be tempted to apply to multiple lenders online - this racks up hard searches on your credit file and can make it worse.
  • Try to settle any outstanding debts you can, and limit your outgoings.
  • Avoid payday loans at all costs - other, less expensive lending is far better as this has less of any adverse impact when going through a mortgage credit check.
  • Use one bank account and manage all your spending and income through it.

If you need more help with repairing your credit rating or understanding the best ways to recover your credit score before applying for a mortgage, give our team a call on 0330 304 3040.

Can I Remortgage a Property With a Bad Credit Broker?

You can indeed - Revolution works with all sorts of clients, from first-time buyers to those looking to remortgage to release equity from their home.

The same eligibility criteria will usually apply, and a lot depends on how much equity you own, and how much you wish to borrow.

What Is the Credit Checking Process When Working with a Mortgage Broker?

Brokers will usually run a credit report from one of the major credit reference agencies, or sometimes from all of them.

Credit reports run by Revolution Brokers are always a soft search - i.e. we never run a full search that will leave a mark on your credit file without seeking your permission. Usually, a hard search is only required at the final stages of the application process when you decide to proceed with an agreement in principle.

You can also check your credit scores, and it is wise to look at Experian, Equifax and TransUnion as each will have a slightly different interpretation of your creditworthiness.

If you already have your credit file and can share this with your broker, it will speed up the process, and you can walk through any adverse credit and the circumstances to give us a head-start on identifying the right lenders to apply to.

Remember that some bad credit lenders aren't interested in your credit score at all, and will instead look through your credit history, possibly ask for context about any difficulties, and then assess your application on its merit rather than relying on a score assigned by one of the credit reference agencies.

What Information Will I Need to Give My Mortgage Broker?

Your broker will need to ask for a few pieces of information to understand your circumstances, requirements, and then assess which way to proceed with your mortgage application.

They will need to know information such as:

  • Your employment status and income - if you are in a stable, permanent role, this is the ideal. Specialist brokers work with self-employed applicants and can help with meeting affordability assessments.
  • How much deposit you have - usually, the UK mortgage market requires a deposit of 5-15%, with the higher the deposit, the better the rates you will be offered.
  • Your age - some lenders restrict lending over age 75 or 85, and others have no age cap at all.
  • What property you wish to buy - standard bricks and mortar properties are the easiest to mortgage, whereas non-standard properties such as those with a thatched roof require a niche lender.
  • Your expenses and other obligations - these include other loans, outgoings, and how many dependents you have.

Bad Credit Mortgage Broker FAQs

The Revolution team has listed below the answers to some of the most common questions we received about bad credit mortgages.

How Do Bad, Low, and Poor Credit Mortgage Brokers Differ?

They are pretty much the same - low credit usually refers to a low credit score, which some bad credit lenders do not consider at all.

Poor credit may mean that you have no credit rating at all, so may not have experienced any adverse issues, but never have taken out any borrowing before. This can be as tricky an issue, as without a credit history it can be difficult for a lender to assess how creditworthy you are.

Bad credit usually means someone who has had problems with credit before, such as having arrears, late payments, or CCJs showing on their credit file.

Which Credit Reports Will a Mortgage Lender Run?

Every lender is different, some will run multiple credit reports, and some will not use them at all.

Most lenders will use one or a combination of the larger credit referencing agencies; Experian, Equifax and TransUnion. These reports give them your credit background and help understand where you meet their criteria.

Each credit report will be different giving the different scoring systems in place, and others will be less interested in your credit score assigned, and more in your conduct overall and how well you have recovered from adverse credit issues.

Can a Broker Help me Get a Mortgage With an IVA?

Yes, it is possible to secure a mortgage if you have an IVA as with any other credit issue. It is unlikely that a mainstream provider will be able to offer to lend or offer the best rates, and so working with a niche broker is essential.

Why Is It Important to Use a Broker When Getting a Mortgage with Bad Credit?

Brokers work with multiple lenders across the mortgage sector, and so can analyse the very best deals for you without any limitation on the products they can offer.

As a specialist bad credit broker, the Revolution team can help you understand which eligibility criteria you meet, select the best lenders to apply to, and negotiate rates and terms on your behalf.

Expert Bad Credit Mortgage Broker Support

Revolution Brokers have years of experience in helping applicants will all manner of bad credit issues secure the lending they need.

For personal support, contact us on 0330 304 3040 or send an email to info@revolutionbrokers.co.uk.

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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