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Are Clients Able To Utilise The Mortgage Guarantee Scheme If They Have Bad Credit?

The answer is simply… Yes, however you must keep in mind that a mortgage acceptance may not be as easy and you may think. You potentially maybe at risk of ending up with a much higher interest rate. Usually, Bad Credit Mortgages come with higher deposit requirements to offset the risk the lender is taking on, to make them a little more comfortable with the overall borrowing and the borrowers bad credit circumstances. So, you’ll likely find that the options may be limited through the guarantee scheme, as realistically you are only putting into the deal a 5% deposit. Although speaking with a specialist independent mortgage broker could be useful as they potentially are able to source deals that are not available to clients directly. So although finding a bad credit mortgage using the mortgage guarantee scheme may be difficult if you speak to the right people with the knowledge of the market it mat be possible for you to get yourself a bad credit mortgage using the mortgage guarantee scheme.

Retaining the services of a great independent mortgage broker is the key to success

Making sure you’re ready, issues that could affect you getting the mortgage:

  • Historical debts: believe it or not the longer the issues have been on your credit file, the better that looks to a new potential lender.
  • How severe was the issue: Maybe, a property repossession would be very difficult to get over the line, but maybe a missed communication commitment payment may be easy for the lender to agree.
  • Why did the bad credit occur: It is known that some lenders may look at a credit indiscretion a bit more favourably if they know there was a genuine reason for it. They tend to look at the situation better if for a genuine reason rather than you just didn’t want to pay it.

There are different categories of bad credit

If you have had or currently have what is perceived as bad credit, then the likelihood is there is undoubtedly going to be a problem when applying for a bad credit mortgage if you’re applying through the mortgage guarantee scheme. The lending institutions who are happy to lend to borrowers who wish to utilise the mortgage guarantee scheme are usually high street banks or well know building societies. These long-standing financial institutions are usually going to frown upon any bad credit issues you have or have had in the past. Although as we have already mentioned within this article, if you retain the services of a professional independent mortgage broker to assist you in your search for a bad credit mortgage utilising the mortgage guarantee scheme then although difficult, it certainly could be possible and achievable to make your dream of home ownership become a reality.

Less severe credit issues

Whilst researching this bad credit mortgage article we found that mortgage lenders within the United Kingdom may consider the following types of bad credit to be the least severe…

  • Little or no credit profile to speak of
  • Having a low credit score can really affect your chances of getting a bad credit mortgage
  • Historical late or missed payments

 

 

Severe credit issues

It will definitely be much harder to obtain a bad credit mortgage utilising the mortgage guarantee scheme with the bad credit issues listed beneath.

  • Mortgage payments being missed
  • Defaults or defaulted credit balances
  • CCJ – county court judgements
  • DMP – debt management plans
  • IVA – Individual voluntary arrangement

Extremely severe credit issues

If you have any of the issues below, it is going to be impossible for you to get a bad credit mortgage utilising the mortgage guarantee scheme.

  • Insolvency or bankruptcy
  • Repossession of a property
  • A mixture of all of the issues listed

Making the most of your chances to obtain your bad credit mortgage utilising the mortgage guarantee scheme, it is important to understand there are things you can do to help yourself. The best thing you could do to help yourself is to retain the services of a good independent mortgage brokers. Search for local mortgage brokers within your area. Check the mortgage broker out thoroughly and ensure that you are comfortable with them and their work ethics. Make sure your independent mortgage broker has good local knowledge, good industry knowledge and most of all has good professional contacts to help and guide you to the end goal of home ownership. Having bad credit should not be a noose you carry around your neck for your hole life. There are many people that by no fault of their own have found themselves in hot water financially. Search your local broker online and good luck in finding your perfect home. For more info visit site: https://imbonline.co.uk

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Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of our Independent Mortgage Brokers to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisers working for or with Independent Mortgage Brokers are fully qualified to provide mortgage advice and authorised and regulated by the Financial Conduct Authority. All our independent Mortgage Brokers will offer advice specific to you and your needs and circumstances. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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