Application Tips

Can you get a mortgage with Bad Credit?

There are many different things a lender will consider when you apply for a mortgage.

The obvious things such as your credit profile, and proof of income are always important, but we find that is in other areas, not immediately obvious to our clients, that applications may be declined or delayed.

Lenders will normally want to see your latest three months bank statements as part of their underwriting assessment. They want to see that you maintain your account in good order, meaning that you keep your account balance ideally in credit, or at the very least, well within any pre-agreed overdraft limit.

If your bank statements show evidence of unpaid Direct Debit Mandate or unauthorised overdraft fees, this can lead to an application being declined. Some lenders view it as an indication that you are not managing your finances satisfactorily, and a sign you may not be able to maintain your new mortgage payments. This is particularly true if the new mortgage repayments are higher than your current rent payments, or you are living with friends or family and not party to a rent agreement.

Another matter which cause issues with an application are recent late payment profile on unsecured credit accounts such as unsecured loans or credit card accounts.

Although some lenders will accept the odd late payment on unsecured credit accounts, being currently or recently in arrears on a number of different accounts can be a problem.

Boost your chances of getting a mortgage

You should try to maintain all unsecured credit accounts. Wherever possible bring any accounts currently back up to date ahead of proceeding with a full mortgage application.

Finally, you should avoid taking out any payday loans or other forms of short term lending, close to making a mortgage application. Lenders will decline an application where there are active payday loans or have recently been, payday loans in place.

If you would like to speak with us about applying for a bad credit mortgage, please contact us today for a no obligation assessment or simply complete our Online Mortgage Enquiry Form.

Solicitors For Adverse Credit Mortgages

Getting a Mortgage with Bad CreditThe choice of solicitor acting on your mortgage application can determine the length of time your transaction will take to complete.

We find that the effeciency between different solicitor firms can vary considerably and where a solicitor does not act in an efficient manner, the time taken to complete can be extended putting pressure on the sale and purchase chain, and in the worst case, threaten the whole transaction, where people within the chain threaten to, or actually pull out of the sale or purchase.

When selecting a solicitor to act for you, please note that all solicitors are not able to act for all lenders, so it is recommended you contact us before appointing a solicitor.

We have encountered a number of clients recently who have appointed a solicitor and paid fees etc, only to have to transfer to another firm, as the acting solicitor was not on the selected lender’s panel of approved solicitors.

Please note that when you select a solicitor, the chosen firm is required to act for you, and also act for the lender on your purchase or remortgage, and only solicitors who are entered on their approved solicitor panel are authorised to act on the transaction

We act for you to ensure we select the most competitive mortgage product for you based on your circumstances and requirements, and once we have confirmed the lender, we can then guide you with the choice of solicitor.

Most lenders have a panel of approved solicitors who are able to act for them on your mortgage application and we can provide you with a ist of the lender’s panel solicitors. We also work with some solicitor firms who we can recommend to you, who we find provide competitive prices and a reliable service, and this will help to progress your mortgage to completion as smoothly as possible.

Please feel free to contact us to discuss the choice of solicitor and we can go over this with you in further detail. For a no obligation assessment simply complete our Online Mortgage Enquiry Form.

Help to Buy Mortgages with Adverse Credit

Bad Credit Mortgages - Help to Buy with CCJ's - Help to Buy Mortgage with Bad CreditUntil recently there were no mortgage options available to people with an adverse credit history who want to proceed with a mortgage application under the government backed Help to Buy or Shared Equity schemes.

Help To Buy Equity Loan Scheme and Bad Credit Mortgages

Within the scheme, the government provides a 20% equity deposit. Under the London Help to Buy scheme this can increase to a 40% deposit. The applicant then has to provide a minimum of 5% deposit from their own resources up to a maximum of 20% own deposit.

There are no repayments to make in respect of the government equity stake for the first five years of the mortgage term. Interest is then charged at the prevailing rate, currently this is around 1.75% of the equity stake mortgage amount, so this will be factored into the mortgage lender’s affordability calculations.

Help to Buy with CCJ’s

There are now two mortgage lenders operating Help to Buy schemes where past adverse credit is allowed for. Each lender has their own criteria, but past defaults and CCJ’s are accepted depending on the amounts and dates they were registered.

Please note, that at present, the adverse credit mortgage lenders only accept applications for a new build property where the builder is registered under the government’s Help to Buy initiative.

Help to Buy with Bad Credit

Each mortgage is assessed on an individual basis. Our service is designed around you and your needs. Even if you have spoken to other mortgage brokers who have been unable to help you obtain a mortgage approval please contact us. We have assisted many clients who have been declined elsewhere.

For further details and to establish if you are eligible for the Help to Buy adverse credit mortgage products, please contact us today for a no obligation assessment or simply complete our Online Mortgage Enquiry Form.

Poor Credit Mortgages

There are a growing number of people who are excluded from getting a mortgage with mainstream banks and building societies but here at Selective Mortgages we have access to lenders via whom we can place poor credit mortgages.

We have access to all current adverse credit mortgage lenders who can consider applications from people with a poor credit profile.

Adverse Credit Mortgage Specialists

As a firm we specialise in placing adverse credit mortgages and bad credit remortgages.

There have been a number of new adverse credit mortgage lenders who have launched products over the last 12 months and we have access to all of the lenders who operate in the poor credit mortgage sector.

We also have access to some regional building societies who can consider adverse credit mortgage applications on a case by case basis at their normal rates where they are able to proceed.

Poor Credit Mortgage Advice Tailored To You

As part of our assessment of your application, we will carry out a detailed record all of the relevant information required to establish if we can assist you with an adverse or poor credit mortgage application.

Help with Poor Credit Mortgages - Bad Credit Mortgage SpecialistsPlease feel free to take the next step and contact us by phone or completing our Online Mortgage Enquiry Form on the main section of the website and we will be pleased to try and assist you in your search for a mortgage.

Brexit and Adverse Credit Mortgages

Adverse Credit Mortgage BrokerThe EU Referendum decision for the UK to leave the EU is having an impact throughout the UK economy and will no doubt continue to do so for some time to come.

This article addresses the current situation regarding the decision to leave the EU and the UK adverse credit mortgage market.

As at today’s date there is virtually no change to the lending criteria for adverse credit mortgages, one lender who offered a 90% mortgage withdrew the product. Currently we are not aware of any other lenders withdrawing products or tightening up lending criteria.

We have had e mails from a number of adverse credit lenders stating it is “business as usual” and that they do not expect to making any negative changes to their product range or criteria in the near future. So at present, there are still a number of adverse credit lenders who can consider a mortgage application with a 15% deposit.

Many people appear to be nervous of proceeding with a house purchase following Brexit and of course everybody will have their own view on what is right for them.

Our view is that at present there are strict rules applied on mortgage affordability and lenders will not allow people to overstretch themselves when assessing the maximum mortgage advance available. We can usually secure a fixed rate mortgage which ensures your repayments cannot increase during the fixed rate period.

There is the possibility of a short term reduction in house prices as the impact of Brexit takes shape. Longer term it is not clear where house prices will go. However many people are feeling that if they want to purchase a house because it is right for them and their family, then as long as they are comfortable with the mortgage repayments now and in the future, taking account of other finance commitments and general living costs, then buying the house they want to make their home, is the right decision for them. Of course each person has to decide what is best for them taking account of all the factors involved.

If you would like to speak with us about the above subject or indeed any other mortgage related query, please feel free to contact us.

New Adverse Credit Lender Options

Until quite recently, the number of lenders who were active in the adverse credit mortgage sector had not changed for a number of years and the level of adverse credit which was allowed by these lenders had remained the same over this period.

Over the last few year years a number of specialist adverse credit mortgage lenders have launched and the products they offer allow for an increased level of adverse credit to have been registered depending on the level of deposit which is available.

In addition we have access to several regional building societies who will consider applications where adverse credit which has been fully settled for over year, the lender will assess applications on an individual basis.

We recently secured a mortgage approval for a client who had a £15K CCJ registered but which was settled for over a year and had since, also had late payment profile on a credit card registered, but back up to date for one year, this client was offered an interest rate of 3.80%.

One of the lenders we have access to will now consider an application with past adverse credit with a 5% deposit.

With all of the above positive developments, there has never been a better time to try and progress a mortgage approval where adverse credit has been registered.

We would be pleased to hear from you with your mortgage enquiry, please contact us via our online mortgage enquiry form or call us on our Freephone number and we will do out utmost to assist you in your search for a mortgage.

How to get a mortgage with bad credit

Adverse Credit Mortgage BrokerYou have taken the first step by getting in touch with a specialist mortgage broker who are experienced in placing mortgage for people with an adverse or poor credit history.

 Selective Mortgages have over 15 years experience of helping people to get mortgages where they have a past adverse credit history.

 Whether you are eligible for a mortgage will depend on a number of different factors such as your credit history and your income, and you will normally also be required to provide a minimum 15% deposit to apply for a mortgage.

 If you have access to a copy of your credit file, you can forward it to us for assessment, if you do not have a copy we can let you know how to request a copy to send on to us.

 As part of our assessment of your application, we are required to carry out a fact find where we record all of the relevant information required to establish if we can assist you with an adverse or bad credit mortgage application.

Please feel free to take the next step and contact us by phone or completing our Online Mortgage Enquiry form on the main section of the website and we will be pleased to try and assist you in your search for a mortgage.

New Adverse Credit Mortgage Products

Poor Credit MortgagesSome good news was released this week regarding the availability of mortgages for people with an adverse credit history.

If you have a minimum 20% deposit in place, mortgage options which allow for up to 5 defaults and 3 County Court Judgements being registered are now available. No monetary values relating to the defaults or County Court Judgements are applied, although acceptance is subject to applicants passing a credit scoring application process.

Previously, the most a lender would allow was 2 defaults and 1 County Court Judgement up to £2,500 in value within the last two years, so the new products represent a big shift in the adverse credit mortgage sector, and will mean that more people will now be able to proceed with a mortgage application where previously they may have been declined.

The new two year fixed rates start at the following rates:

Up to 70% mortgage – 4.99% fixed

70% – 75% mortgage – 5.39% fixed

75% – 80% mortgage – 5.69% fixed

For people with a 15% – 19% deposit, the previous adverse credit allowance of 2 defaults and 1 County Court Judgement up to £2,500 in value within the last two years, still apply.

There are other lending options available for people with a deposit of 40% which allow for a higher level of past arrears, defaults or even past bankruptcies or IVA’s.

To find out more about these new products and other mortgage options which may be available to you, please call or e mail us, and we will be pleased to provide further details.

Selective Mortgages - Poor Credit Mortgage Broker, West Yorkshire