We have plenty of real life examples of customers with Defaults, arrears, CCJs even Bankruptcy who have been able to get bad credit high street mortgage. To have a read of some of those examples, take a look at our Success Stories page.
When we speak to prospective ‘bad credit mortgage‘ customers, we tend to have a quick chat.
Part of that conversation is to find out about what you are looking for but most importantly we ask a few simple but important questions that help us to give an idea of what your likely options will be.
What can I do to improve my chances of a Mortgage?
The important thing is that there are things you can do to improve your chances of a normal high street mortgage even with bad credit, a or “bad credit high street mortgages” if you will.
What you can do will depend on how far away you are from applying. If you have found a property then realistically we have to work with your situation as is and try to make the best of it.
If however you have a couple of months or more, then we can start to put things in place to increase your chances of success.
What can help your Mortgage application?
Deposit – Obviously, it goes without saying the larger your deposit, the more chance you have of passing the credit score. Typically this goes in 5% banding’, so a 10% deposit would be better than a 5%. But there are other things, if your deposit is saved or part saved rather than all gifted that can go in your favour. It is not the end of the world if it is all gifted, but if you are 3-6 months away from applying, that gives you 3-6 months to maybe put some money aside – at that point we can argue that the deposit is part savings and part gift which again, can make a difference with some mortgage lenders.
Satisfying your defaults/CCJs – if you satisfy these a month before your application, it will look like you have done it solely for your mortgage application. If it is 12 months ahead of time, it can appear to lenders that the opposite is true. If it less than 6 months before an application is due to be made, then generically with the comments above about deposits, I would put your money towards a larger deposit. Although I think a lot depends on how much we are talking. If you have 3 defaults totalling £100, then it could be a good idea to satisfy them, if the 3 defaults are for £10,000 then we may need to look at the pros and cons of paying them off or putting that £10,000 towards your deposit. This is one of those things where the devil is in the detail.
Debts – Whether your debts are credit cards or loans makes very little difference. What can affect your application however is the repayments. With loans, this is quite simple to work out as it is what you pay each month, with credit cards it is not actually your monthly repayments they use, but typically 3% or 5% of the balance. If affordability is tight, then it could be worth looking to refinance these if if it 6-12 months before making an application – one exception to that could be if you are doing debt consolidation as part of the mortgage application. 0% deals do not get looked at any differently than rates of 10% or even 20%.
What can Mortgage Success do to help your Mortgage application?
As mentioned at the beginning of the post, we initially ask a few questions to get an idea of what you are hoping to achieve and your circumstances. If you have 5 defaults, a gifted deposit and 10% deposit, then your chances of a high street mortgage is pretty slim.
If you have 5 defaults, a 25% deposit which has come from savings, then we stand a better chance of bad credit high street mortgage rates. The idea of the conversation is to understand what you want and without wanting to sound condescending – to set your expectations. There are times where we know it will not fit on the high street, times where it is 50/50 and times where it is quite possible. So by having an initial conversation we can give you an idea of what we think will be available to you.