Why It’s Not Impossible!
Purchasing a property with bad credit might seem like it’s impossible, you may have been turned down elsewhere, but you do have options. Here is everything you need to know about buying a home with less-than-ideal credit, including how a bad credit mortgage broker can be an invaluable part of the process.
Understanding Your Credit Profile
Before applying for a mortgage, it’s essential to understand your credit profile. This includes checking your credit report, which you can do through agencies like Experian, Equifax, or TransUnion, we recommend using Checkmyfile which is a multi-agency credit report and shows everything the big three agencies have recorded. Take a close look at it, keeping your eyes peeled for errors. It’s really important that you address any discrepancies that are there, as those inaccuracies could further harm your chances.
Then, it’s time to pinpoint issues that may deter lenders, such as missed payments or high credit utilisation. Taking steps to improve these areas can make a big difference!
Your mortgage broker will be able to check your credit report for you and highlight any areas that need addressing.
Are There Options for Buyers with Bad Credit?
Yes, there are! Even with a poor credit score, you have options for purchasing a property. There are plenty of lenders out there who cater specifically to applicants with bad credit. While their rates may be higher, they will be much more flexible in considering your circumstances.
You might also want to consider a guarantor mortgage, where a trusted person will agree to cover payments if you default. This reduces the lender’s risk and improves your approval chances. Providing a larger deposit can help too! This does a lot to offset the risk for lenders and increase your likelihood of approval.
How a Mortgage Broker Can Help
Navigating the mortgage market with bad credit can be really challenging, and this is where a mortgage broker becomes invaluable. They have access to a wide range of lenders, including those specialising in bad credit mortgages. They understand each lender’s criteria and can match you with the best options for your situation.
An experienced broker will also assess your financial circumstances and provide tailored advice to improve your application. This will really boost your chance of being approved!
Giving You Support
Unsuccessfully applying to multiple lenders on your own in a short space of time can harm your credit score further. A broker can streamline the process by only applying to the most suitable lenders on your behalf, increasing your likelihood of success. If you have unique circumstances, such as being self-employed or recently recovering from bankruptcy, a broker will be able to further refine their search. This will save you a massive amount of time and stress!
How to Prepare for a Mortgage Application
In addition to working with a broker, taking these steps can improve your chances of being approved for a mortgage:
Save up for a bigger deposit
Pay off or consolidate debt
Avoid taking out new loans or credit cards
Build a stable financial history
Consider a guarantor, and carefully vet the candidates
What Next?
While buying a property with bad credit comes with challenges, it is far from impossible. So why not get in touch with a trusted, experienced mortgage broker today?
