Which Mortgage Lenders are best for bad Credit?

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Which are “the best Bad Credit Mortgage Lenders”, is something we get asked from time to time.

Whilst the obvious answer maybe that the best bad credit mortgage lenders, are the ones that will give you a loan, the more practical answer is that there is no (single) best, it comes down to your circumstances.

But I thought it would be interesting to post some facts and figures after reviewing our stats from 2019 as things may be better than you think…

Best Bad Credit Mortgage lenders in 2020

best Bad Credit Mortgage Lenders

The simple answer is that there is no “best”. The best lender will come down to your circumstances and your requirements. And infact those lenders will change periodically depending on the lenders risk appetite at the time. Generally lenders have 2 ways to gain more business, lower their rates or lower the barriers to being accepted and lenders will use a combination of these throughout the year.

In 2019, we used 19 different Mortgage lenders, of those 19, 6 are classed as specialist bad credit mortgage lenders. The 13 remaining were either high street mortgage lenders or quirky manual underwriting lenders who can take an individual approach when underwriting your application and those accounted for 64% of our customers .

The 6 Bad Credit lenders we used accounted for 36% of our customers. That means 64% of our customers ended up on normal rates last year. Some of those 64% will be customers with no adverse, if we assume 50/50 then that means nearly a third (32%) of all of our customers in 2019 or close to 50% of our customers with bad credit managed to get a Mortgage with normal rates or even on the high street.

Rates for customers with bad credit ranged from under 2% up to around 6%, which shows that the devil really is in the detail when it comes to what is available. It is not always about the size of the deposit, in the example for the sub 2% rate, the customers had a 10% deposit.

I think this emphasises why it is worth speaking to a specialist Bad Credit Mortgage Broker. Some brokers will say it can not be done and others will go to a specialist bad credit Mortgage lender, even where one is not necessarily needed. Part of our job is to understand which normal lenders will accept which adverse. As we deal with Bad Credit applications on a daily basis, it means we get a good idea of which “normal” lenders will accept blips in the past and which lenders we may need to go to if you adverse is a little more severe.

Which Bad Credit mortgage lenders are best?

We see a lot of adverse which can vary massively. There are Defaults & CCJs, which may or may not be Satisfied Bankruptcies and IVAs, or DMPs. Your adverse credit issues may be 12 months old or 5 years old, it may have been a one off blip due to redundancy or illness for instance or it could have gone on over a couple of years due to being young and naive.

The best lender for you, may not be for someone else. The rates available can vary significantly as can the options available, from normal high street lenders through to specialist bad credit lenders.

If you would like to discuss your circumstances to get an idea of what is available to you, we will happily have a chat with you over the phone and see how we can help you move forward.