Low Credit Scores
There are many lenders in the market who specialise in providing mortgages to people who have had credit issues, both recently and in their past. However, it all depends on the degree of adverse credit history. For example, someone who defaulted on a credit agreement a year ago, may have a few options of specialist lenders. Whereas, someone was declared bankrupt yesterday will have very few options.
If you have circumstances you’d like to discuss, get in touch so we can arrange a chat with a mortgage specialist.
Many lenders who specialise in loans for applicants with credit issues will have higher interest rates or higher fees. However, in many cases they’re not much more expensive than options with high street lenders.
Waiting for Credit Rating Improvement
If you are in a position where you can wait then it may work in your favour, but for many of us purchasing a home is a necessity that can’t wait. A good adviser will let you know your options, how long you might have to wait, whether that is months or years.
A specialist mortgage may be used in the short term to help you secure the property you want, then in a few years you could remortgage and move to a more competitive interest rate with a new lender (assuming you’ve improved your credit rating during this time).
Payday Loans can affect mortgage applications. Payday loans are a signal to lenders that you have lost control of your finances and are struggling month to month. We have helped clients who have taken out payday loans intentionally, thinking paying it back on time would improve their credit score. Unfortunately, this is not the case. This means the majority of highstreet lenders may turn you away, even if you pay it off without fail.