Can you obtain a mortgage with bad credit?

February 23, 2016 by Brendan O'Neill

Advice & Tips

There are many people who have had a bad experience following the economic downturn, leaving them facing debts and financial difficulty. Your credit history is a crucial aspect of obtaining a mortgage, and bad credit can have a negative impact.

You may want to check your credit score and make sure that all the entries on it are correct. Apply to have any incorrect entries removed. Use just one credit card to rebuild your credit history, but pay it off at the end of each month. Set up direct debits or standing orders to pay monthly bills, including the minimum amount on your credit card, as forgetting to pay on a regular basis will also count against you.

Try to find stable employment as this can help to improve your credit history. Long periods of temporary employment, or moving from job to job can affect your credit history.

It is possible to obtain a mortgage even with a bad credit history, although you may not be offered the better rates. You may also need a larger deposit, which could be as much as 40%. An alternative option is to have a guarantor, although this should be approached with caution as the guarantor may be tied into your mortgage for a lengthy period.

Spend a year trying to repair your credit history, before applying for a mortgage, to give yourself a better chance of securing credit.

If you find yourself facing financial difficulty but would like to be able to buy your own home, consult with a mortgage adviser who has undertaken CeMAP training, as they may be able to assist you.