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Benefits of Bad Credit Mortgages

Do you wonder what lenders will offer you for a mortgage deal on your home? The big obstacle, as you know, is your bad credit history. Some of the most common obstacles that prevent people from being accepted in credit programmes are the following: missed or late payments for loans, credit cards or store cards; defaults or CCJ’s; mortgage arrears; inappropriate conduct of bank account; repossessions and bankruptcy, etc. Generally, once people are faced with one or more of these problems, they are no longer considered to be eligible for obtaining loans or mortgages, losing their financial credibility towards banks and other credit-offering institutions.

However, before you decide not to mortgage because of bad credit history, let me say there are companies like Independent Mortgage Brokers, offering Bad Credit Mortgages to people with a less than perfect credit situation. Through this article, we will inform borrowers of bad credit mortgages, the options and benefits for bad credit.

So, why is it that mortgage loan providers ignore bad credit history while offering bad credit mortgage? Is it because they don’t fear for payment? Well, fact of the matter is that most borrowers with bad credit history do pose a higher risk on the loan. Will the borrower give in this time? No one really knows!

Therefore, it is really hard to say how loan providers will agree to lend to borrowers with bad credit history. Making the decision to lend bad credit mortgage is mostly influenced by the credit score of borrowers. Your credit score is demonstrated by taking into account the borrowers’ credit file. In general, mortgage lenders do this by checking with the main credit reference agencies (CRAs). Depending on the lender, they will report to one or two CRAs, whereas Independent Mortgage Brokers will report to all three: Experian, Equifax & TransUnion, to calculate a more accurate credit score.

Borrowers with a credit score of 710 and above will have most mortgage lenders running after them to take mortgage loans. Borrowers that have a credit score in the range of 620-700 can also get good deals on mortgages. But most borrowers who earn a score of 500 and below are the ones who form the customers of bad credit mortgages.
What are some benefits or advantages from a bad credit mortgage?

1.First Home Purchase

Through the process of bad credit mortgage, the borrower will make purchase or construct a home. If this is a first home purchase, most borrowers can be eligible for some discounts available to an individual who is taking on a first time mortgage.

2. Reasonable Interest

Interest rates on bad credit mortgages is largely disputable. Many lenders allege that their act of approving the borrower a mortgage was a favour; the borrowers wouldn’t have been able to mortgage their house had they not associated with them. Borrowers who have been refused mortgage loans or other credit lines a few times will easily accept the statement. Borrowers like this will often fall prey to the lenders who charge huge sums of interest and fees on the bad credit mortgage.

However, determining a reasonable interest rate is not as hard as you think. Keep in mind that your will be higher than that of someone with good credit. One can easily estimate the interest rate by making a comparison of interest rates charged by principal lending banks and other financial institutions. Mortgage calculator has a record of the interest rates for several categories of mortgages. When looking into the bad credit mortgage category, you know of the least rates prevalent for the category. You can also confirm that the interest rates found are correct through a mortgage quote from another lender. Mortgage quote is an offer by a lender to the borrower to accept bad credit mortgage with some stated terms attached.

Another important use of mortgage quotes is to help borrowers in choosing a particular lender that will fit their needs. If the terms are alright with the borrower, and he/she finds that the terms offered a particular lender are the best of all lenders, he/she can choose to accept the bad credit mortgage offered by that lender.

3. Property Investing

An important benefit when getting a bad credit mortgage is that you are keeping more of your money by not ‘throwing it away’ on a rental property. The amount of money you may be able to save, and the equity you an acquire by owning a house can be very beneficial to you in the long run. It is worth it to consider mortgage solutions to purchase a property, even if your credit isn’t perfect. This allows you to have more options in the future to make other large purchases when your credit rating increases.

4. Dealing with Specialised Companies

Experienced and reliable bad credit mortgage-offering companies like Independent Mortgage Brokers, are the ideal choice for persons with poor prospects of obtaining mortgages or loans somewhere else. Unlike other credit-offering institutions, companies that are specialised in the bad credit mortgage branch service all categories of people, regardless of their credit situation. They understand that these people rarely receive any financial help whatsoever from regular banks and other similar institutions and offer them the opportunity to remediate their financial issues.
Such companies also include many other different packages of services, such as regular mortgages, mortgage refinancing, remortgaging, interest only mortgages and second mortgages. UK mortgage brokers are renowned for their professionalism and experience in the field, as well as devotion in servicing the customer. An important part of their service, is providing free mortgage advice. Be reassured that with their specialised help and assistance, you will be on track to recover from bad credit problems and other financial difficulties.


To summarize, bad credit mortgages give borrowers a great second chance to improve their credit history, giving them a positive mark on their credit file. Once you have obtained a bad credit mortgage and you have had a good track record with the lenders, you can re-finance your mortgage, obtaining a lower interest rate on your mortgage loan. This all combined, allows you to rectify your credit situation over the course of time and get your finance back on its feet.

Remember, you’ll never know if you could qualify for a Bad Credit Mortgage if you don’t try. Start taking control of your financial future today!

If you want to receive some valuable online mortgage advice, please visit Independent Mortgage Brokers.



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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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