Can you get a mortgage with bad credit?
In many cases, yes. Whether a lender will offer, and on what terms, depends on three things: what the credit issue was, how long ago it happened, and how your finances look today. Older, smaller and settled issues are treated far more gently than recent or repeated ones.
As a general picture: a missed phone bill from years ago may barely register, a satisfied CCJ from three years ago is workable with many specialist lenders, while a bankruptcy discharged last year will need a larger deposit and a smaller pool of lenders. There is almost always a line back to a mortgage - the question is when and on what terms.
Credit problems lenders will consider
We arrange mortgages for applicants with the full range of adverse credit:
- Missed or late payments - on credit cards, loans, utilities or a previous mortgage
- Defaults - registered when an account is closed after repeated missed payments
- County Court Judgments (CCJs) - satisfied or unsatisfied, subject to age and size
- Debt management plans (DMPs) - active or completed
- Individual voluntary arrangements (IVAs) - usually once payments are established or completed
- Bankruptcy - normally after discharge, with more choice as years pass
- Repossession - the hardest history to place, but not always impossible after time has passed
Each of these carries different lender rules on time elapsed, amounts involved and whether the debt was settled. Two people with 'a CCJ' can have completely different sets of options.
How lenders assess adverse credit
- What happened: The type of credit event and the amounts involved - a small default is viewed very differently from a repossession
- When it happened: Most specialist lenders work in time bands; issues over two or three years old open up substantially more choice
- Whether it is settled: Satisfied CCJs and cleared defaults read better than open ones, though some lenders accept unsatisfied entries
- Your position today: Stable income, sensible outgoings and clean recent conduct show the problem is behind you
- Your deposit: Adverse credit lending usually needs a larger deposit - often 15-25% depending on severity - because the lender is taking more risk
Rates on adverse credit mortgages are typically higher than high street deals. The usual plan is to take a specialist deal now, rebuild your record, then remortgage onto mainstream terms once the credit issues have aged - we build that route in from day one.
Improving your chances
- Get your credit reports from the main agencies and check them for errors before applying
- Settle what you can - a satisfied CCJ or cleared default widens your options
- Avoid new credit applications in the months before a mortgage application
- Register on the electoral roll at your current address
- Save the largest deposit you reasonably can
- Avoid multiple mortgage applications - each hard search compounds the problem
The last point is where advice earns its keep: we match your history to lenders whose published criteria you actually fit, so your application goes in once, to the right door.
Costs and fees
Adverse credit history counts as specialist lending, so our broker fee is up to £1,495 rather than the typical £1,250 for a standard mortgage. Your exact fee is confirmed with you in writing before you commit to anything - full details are in our regulatory statement.
Other costs mirror any mortgage: possible lender arrangement fees, legal work, and valuation. If your adverse credit mortgage is a remortgage, the valuation and legal fees are free, as they are on all remortgages we arrange.
Why use LifePro?
- Whole-of-market, independent mortgage brokers covering all of the UK
- Access to specialist adverse credit lenders alongside the high street
- Honest guidance - if waiting six months would transform your options, we say so
- CeMAP qualified advisers with 20+ years' experience
- A rebuild plan: specialist deal now, mainstream remortgage when your record allows
If your credit problems came from debts that are still outstanding, a debt consolidation remortgage is sometimes part of the answer for existing homeowners - your adviser will talk through whether it fits.
