Surprisingly this is not an easy question to answer. The answer depends on the answers to a few questions. I will go through the questions and hopefully by the end of it you can determine whether or not you would be eligible and what the rates will look like. If not, do not worry pick up the phone and we can talk through your personal circumstances.
Your circumstances matter
- Are you looking to apply jointly or on your own?
- Are you married?
- Where is the deposit coming from?
- What bad credit do they have? This is important as it effects the products available.
The answers to the above are important. When I speak to people on the phone I usually say we start off with a pool of maybe 70-90 lenders. Depending on the answers to the above questions they will start to knock lenders out of the pool.
The aim is that by the end of the questions we still have a few options available.
Are you looking to apply as a couple?
The answer to this will rule out lenders no matter how you answer it. “Yes” and we start ruling out lenders based on the bad credit. “No” and it may affect affordability or start to knock out lenders if you are married or the deposit has come from the person not on the mortgage.
It is a very important question though as it can rule out lenders immediately.
Are you married and where is the deposit coming from?
This is not so much an issue if applying jointly, but if doing a single application and married and/or the deposit is coming from the person not on the mortgage it will rule out some lenders. Its not a case of gifting it from one to the other as it would then become a gift with strings attached (ie the donor would want to be able to live in the property).
In any event it is not necessarily a deal breaker, but can kick out a fair few lenders.
What bad credit do they have?
Unlike the above, this is only an issue if applying jointly. This will rule out lenders based on the level of adverse. A single small default from 5 years ago is unlikely to rule out many lenders where as going bankrupt 6 months ago will.
The devil is in the detail when it comes to bad credit and I always recommend getting a copy of the credit report upfront so we know what we have to try and overcome. It can also help us to give you an idea of likely rates from the outset.
Other factors that can affect an application
Are you financially associated? A financial association is usually where you have taken out a credit agreement in joint names. A loan or a mortgage for example in joint names and even a utility bill would see you as being financially associated. You can see any financial associations on your credit report, if they are not accurate it is a good idea to apply to the credit agencies to have them removed.
What does the rest of the application look like? By this we are talking about size of deposit, how long have you been in your jobs, is your deposit a gift or saved or a combination? What do your credit commitments look like? All of these things help to form how your application is scored and that will determine your likelihood of being accepted.
Summary
As I mentioned at the beginning it is quite difficult to answer the question. There are so many factors that will determine whether or not it can be done. Hopefully the above have helped, but if not do please get in touch.
It is not straight forward, sometimes having a 5-10 minute conversation can save you hours of reading on the internet. Please get in touch if you would like to discuss your personal circumstances.