Bad Credit Mortgages are where Mortgage Success excels. Ever since we started back in 2013 our target customers have always been those who have had bad credit.
The main reason for that was because the recession was still fresh in our minds and we came across many people who had hit a rough patch and were struggling to get on the housing ladder or to sort out the situation they were in at the time.
What are Bad Credit Mortgages?
Peoples opinions of what Bad Credit is varies massively, some people think a few late payments are the end of the world and others only consider Bankruptcy to be bad. The reality is that Bad Credit can vary. The main things that can cause problems are:
Recent late payments
– late payments on Mortgages are looked at more seriously than late payments on mobile phone contracts.
Defaults and CCJs
– Again, these can vary in seriousness. Some lenders will ignore defaults and CCJs if they are under a certain value, typically around £250 or if they are for mobile phones. But the first question we ask about defaults is “When were they registered?” The reason for this is that the more recent they are, the more of an impact they will have.
Bankruptcy/IVA or any form of insolvency
– This is another one where the issue is the date. Typically you would need to have been discharged from the bankruptcy for a minimum of 3 years in order to apply for a Mortgage at reasonable rates. That being said many lenders insist on 6 years discharged and other lenders will consider you after one year. So it is always worth a chat.
We see people with bad credit on a near daily basis. Typically most bad credit Mortgage applications fall in to 3 categories:
Many of the people we speak to either had a health issue themselves or a close family member was seriously ill. This can either mean the applicant needed to take time off work or give up work completely. Their commitments were taken out were perfectly affordable but then their circumstances changed. The same goes for redundancy.
Youth/Naivety/Stupidity (not necessarily our words).
Another big one is just “youth”. This could be people who went to uni or started a job and were offered an overdraft, credit at shops, mobile phone contracts and before they knew it, everything just came on top. They have learnt from it and moved on.
This another big one, this is usually where we come across people who have been made bankrupt. Typically it is because they have taken out finance in order to purchase the business or equipment etc.
We do hear from many other people with different circumstances and different histories. If you do have bad credit and you are looking for Mortgage Advice please do get in touch even if you have been declined by other Mortgage Brokers or lenders. We are adverse Mortgage specialists and more than happy to have a no sales spiel call to see if we can help. If not, we will still try to offer some pointers on how to move forward.