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Finding The Right Mortgage

You may be able to search for pretty good mortgage deals yourself even if you are struggling with low credit score or you may have had issues with historical bad debt. Or you may need the help of an independent mortgage broker. Either way there is a lot to consider when trying to find the perfect match when it comes to mortgages.

Brokers will give you access and run a credit check on your file when you will be applying for a mortgage. But you need to be also aware of the fact that some black spots in your credit history carry more weight than others depending on the amounts of money and the time that has passed. If you have a bad credit rating, some banks can refuse to give you a mortgage, some may even put restrictions on you making it even harder to obtain the right finance for yourself.

Smaller regionally based building societies can occasionally be more flexible and they’re geared up in some respects to a more manually underwriting process. These companies are the true specialist bad-credit mortgage lenders, a number of which cater in particular for the average man or woman on the street, who have faced adversities such as, death, illness, loss of income, child birth and divorce amongst other things. The smaller regionally based building societies tend to be able to offer greater flexibility in their underwriting process, but it could mean that they only deal directly with introduced business from an independent mortgage broker. In most cases speaking with a specialist broker may not cost you anything as most would offer free mortgage advice.

There are some steps that you could follow to make your chances slightly better when trying to obtain a mortgage with bad credit history. Below are a few things to consider:

  1. Explain why you have bad credit

What were the reasons surrounding the bad credit? Creditors will undoubtedly want to know the circumstances surrounding the bad credit issues. You need to give a blow-by-blow account of what exactly happened and why the bad credit exists. Providing this information may sometimes be uncomfortable for you and you should prepare to be questioned thoroughly by the lender or the independent mortgage broker. Both will need to ensure that they have the full facts and circumstances which led to the need for you to be considering to take a bad credit mortgage.

  1. Time is important

No matter what bad credit is sitting on your credit file, whether it is a county court judgement (CCJ) or a default or maybe a bankruptcy or similar, the timing of when the bad credit was recorded with the credit agencies is very important. It will give the new mortgage lender an idea of how you have handled credit in the past and present. If the bad credit is historical and you have conducted your credit well say for a couple of years, then a mortgage lender is more likely to give you an opportunity to obtain a new mortgage. If the bad credit is recent then the lender is more than likely going to look less favourably upon this and more than likely ask more and more of you if not refuse your mortgage all together.

  1. Financial Associations

Buying with a partner is good in some respects but if your partner is the one with bad credit issues then you are more likely going to be financially linked to them via the credit files. Some lenders take a very dim view on financial associations with bad credit even if your credit is exemplary, especially if you are married. Lenders usually like a married couple to purchase the property jointly with a joint mortgage, thus ensuring that there is a shared commitment and ultimately a shared responsibility to make the monthly payments. It provides extra security to the lender because if one of the joint mortgagees loses their income there is another one already in situ to make the payments, as they are both jointly and sever ably liable for the mortgage debt.

  1. Building credit

Credit is in most cases not a bad thing. Although if you don’t use credit correctly it can very quickly become a very bad thing. Having bad credit is considered in most cases by most lenders a very bad thing. Building a good credit score could help you when you’re looking to obtain your bad credit mortgage. Credit builder cards are readily available to most people these days and if used correctly can really help when trying to get that bad credit mortgage.

  1. Honesty is the best policy

If you’re looking for a bad credit mortgage then without doubt the most important thing to be is honest. Own up to your indiscretions, explain the why’s and how’s. Help yourself by helping your independent mortgage broker understand your situation as a whole. They will help you formulate a plan, ensuring no time is wasted banging your head against a wall, going around in circles from bank to bank getting rejection after rejection. You may think you are saving time and or money, but speaking to a professional broker usually pays off.

Independent Mortgage Brokers

Choosing the right broker is important. At the same time as it may be technically viable with a view to getting a mortgage with bad credit but undoubtedly it will be more difficult. Furthermore, it may be necessary to work with your independent mortgage broker for some time until you are ready, and your credit score has improved.

Advantages of using an independent mortgage broker:

  • They quite often are able to search the whole market, to find the right mortgage for you
  • It can really speed things up for you once you have been approved for the mortgage with the mortgage lender
  • Making the right decisions at the right time, rather than narrowing your chances by just seeing if you could do it yourself and maybe taking the chance it might just work out.
  • It will save you some anxiety and stress of dealing with many people.

Negative effects:

  • You could end up paying higher costs than necessary
  • You may not have enough deposit
  • Mortgage declines, leaves you feeling deflated and upset.
  • You may have incurred costs or even be liable to pay costs as a result of getting things wrong

Credit Score

Lenders aren’t really too concerned about your advertised credit score you may have with one of the credit agencies. Lenders tend to concentrate upon the actual content of the file. They get very interested in registration dates or satisfaction dates of a particular credit commitment. Lenders tend to use their own internal credit scoring system, but are guided by the content from the three main credit reference agencies with in the UK mortgage market. Experian, Equifax & TransUnion these seem to have cornered the market when it comes to obtaining a bad credit mortgage with in the UK.

Independent Mortgage Brokers based in Halifax are specialist mortgage brokers dealing with many clients across the UK mortgage market. They advise clients before looking for the mortgage to obtain and review your credit file. According Independent Mortgage Brokers when a client contacts them, they advise the client to get a copy of their checkmyfile report. This report is a multi-agency report which provides the credit profile for the client over the all three agencies, so it’s kind of like a one stop shop to review all of a client’s credit information in one place. Although Independent Mortgage Brokers Halifax have no elegancies with checkmyfile they consider this file to be one of the better ones. They also point out that in many of their client’s situations, it may be that a credit indiscretion may be listed with Experian but not Equifax or visa versa. It is always worth checking and getting advice from an independent mortgage broker, quite often they’re able to offer free mortgage advice UK.

Conclusion

Once you are considering taking on a mortgage with the UK, quite simply it may be something you could do yourself. However, speaking to Independent Mortgage Brokers in Halifax they would urge you to speak with them, especially if you’re looking for a bad credit mortgage. There are many pitfalls but many advantages to home ownership. Get as much advice as you can before you take the leap.

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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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