Introduction
We get it—trying to get a mortgage when you have bad credit can feel like an uphill battle. But here’s the good news: it’s absolutely possible! You might be wondering, “How do I get a mortgage with bad credit?” or “Can I buy a house even if my credit isn’t perfect?” The answer is yes, and we at Mortgage Bridge are here to help you make it happen.
Bad credit can come from all sorts of things—missed payments, defaults, or even a county court judgement (CCJ). But that doesn’t mean you’re out of options. There are specialist mortgage lenders for bad credit who take a more flexible approach than high street banks. Let’s break down the different mortgage types, rates, and strategies to help you move forward with confidence.
1. What Is Bad Credit & How Does It Affect Getting a Mortgage?
Before we jump into solutions, let’s talk about what lenders mean by “bad credit.” It usually includes:
- Missed or late payments on loans or credit cards
- Defaults on loans
- CCJs or individual voluntary arrangements (IVAs)
- Bankruptcy
- High levels of existing debt
Lenders check your credit score to figure out how much of a risk you are. A lower score might mean higher interest rates, but don’t worry—there are still plenty of bad credit mortgage lenders near me that are happy to work with you.
2. Can You Get a Mortgage with Bad Credit?
Yes, you can get a mortgage with bad credit, but you’ll need to work with specialist mortgage lenders who consider more than just your credit score. Typically, you’ll need a higher deposit (15-30%) and may pay higher interest rates. However, options like guarantor mortgages, shared ownership, and Right to Buy can help.
3. What Are Bad Credit Mortgages & How Do They Work?
Bad credit mortgages (also called adverse credit or subprime mortgages) are designed specifically for people with poor credit scores. These mortgages usually come with:
- Higher interest rates
- Bigger deposit requirements (usually 15-30%)
- Stricter lending criteria
One of the first questions we get asked is, “How much deposit do I need for a bad credit mortgage?” The answer? The more, the better! But even if you don’t have a huge deposit, there are still ways to get on the property ladder.
4. Specialist Bad Credit Lenders: Your Best Bet
If high street banks are turning you down, specialist mortgage lenders for bad credit could be your way forward. These lenders look beyond just your credit score and consider:
- Your current financial situation
- Your ability to make future mortgage payments
- Any positive changes in your finances
Yes, the rates might be a bit higher, but these lenders can offer more flexibility and help you get a foot on the property ladder.
5. How Do Guarantor Mortgages Work?
If you’re struggling to get approved, a guarantor mortgage for bad credit could be a game changer. This is where a family member or close friend (with a solid credit history) co-signs the mortgage and agrees to cover payments if you can’t.
Benefits of guarantor mortgages include:
- Higher chances of approval
- Lower interest rates than standard bad credit mortgages
- A lower deposit requirement
However, keep in mind that if you don’t keep up with payments, your guarantor will be on the hook—so it’s a big responsibility for both of you.
6. Can a Joint Mortgage Help If I Have Bad Credit?
Another option? Team up with a partner or family member who has a better credit history. A joint mortgage can make it easier to secure a low deposit mortgage for bad credit, since lenders will consider both incomes. Just remember—both of you are equally responsible for repayments, so communication is key!
7. Right to Buy Mortgages: Buying Your Council Home
If you’re living in a council or housing association property, you might be eligible for the Right to Buy mortgage with bad credit scheme. This allows you to buy your home at a discount. Some lenders even take the discount as part of your deposit, which can be a huge help if saving up a large deposit has been tricky.
8. Shared Ownership Mortgages: Part-Buy, Part-Rent
A shared ownership mortgage for bad credit could be an option if you can’t afford to buy a home outright. With this scheme, you buy a share of the property (usually between 25-75%) and pay rent on the rest. It’s a great way to get on the property ladder with a smaller deposit, and some lenders are open to applicants with a lower credit score.
9. Short-Term Mortgage Solutions: Are They Worth It?
Sometimes, a temporary mortgage solution is the best way to go before transitioning to something more long-term. Options include:
- Bridging loans – A short-term loan that helps you buy a property while arranging a more permanent mortgage. These come with high-interest rates, so only use them if you have a solid plan.
- Second charge mortgages – This lets you borrow against your home’s equity to raise funds while improving your credit profile.
These options can work, but they should be approached with caution due to higher costs.
10. How Can I Improve My Credit Score Before Applying for a Mortgage?
One of the most common questions we get is, “How to improve credit score for a mortgage?” If you’ve got time before applying, there are a few things you can do to boost your credit and get a better mortgage deal:
- Make payments on time – This is the number one factor that impacts your credit score.
- Reduce outstanding debt – Pay down credit cards and loans where possible.
- Check your credit report for errors – Mistakes happen, and fixing them can give your score a quick boost.
- Get on the electoral roll – This helps lenders verify your identity.
- Avoid multiple credit applications – Applying for too much credit in a short period can make you look desperate to lenders.
11. Getting Expert Help: Why a Mortgage Broker Can Make a Difference
If all this sounds overwhelming, don’t worry—that’s what we’re here for! At Mortgage Bridge, we specialise in finding the best bad credit mortgage lenders near me, even when banks have said no. Working with a mortgage broker can help you:
- Get access to specialist lenders that don’t advertise publicly
- Find the best possible rates for your situation
- Understand the mortgage process without the stress
Conclusion
At Mortgage Bridge, we’re here to guide you through the process and help you find the best possible mortgage deal. Get in touch with us today, and let’s turn your homeownership dreams into reality!