There are a number of specialist lenders that approve mortgage applicants with bad credit. The market for adverse credit lending has grown over the past few years, giving more people the opportunity of getting a mortgage.
If your default is a mobile phone payment, some lenders will take that with a pinch of salt. On the other hand, if you have mortgage defaults or defaults on loans and credit cards, this is something mortgage lenders will view more seriously.
Adverse credit lenders normally have a tier rating system, meaning if you have minor credit issues you will tier low and if you have missed credit card or loan payments you will tier higher. The interested rate you are offered is based on the tier you are given. i.e. The higher the tier the higher the interest rate.
When applying for a mortgage with bad credit you will need to take into account, that you are a higher risk to the lender. Due to the risk, the lender will insist a larger deposit of 15% or 20% of the house purchase price to be put down.
Just because there are lenders in the market, doesn't mean you are guaranteed to be accepted. Before a mortgage application is submitted a copy of your credit file should be handed to your mortgage adviser so they have a good understanding of your whole financial history.
Mortgage lenders either use Experian or Equifax when credit checking an applicant, so signing up for a free 30-day trial or paying £2 for a one-time credit report will help you understand your credit history before taking the next step.
For more information visit www.elmtreefs.co.uk or call 01925 815 555 and our independent mortgage advisers will be happy to point you in the right direction.