Having a low credit score shouldn’t be the end of the world, and it really isn’t. While many mortgage providers won’t favour those with bad credit scores, there are others who will be willing to go the extra mile with you irrespective of your credit score.
It is possible to get a mortgage with bad credit. However, most regular mortgage providers won’t favour you if you have a bad credit – so, you might have to specifically opt for bad credit mortgage lenders. These lenders offer bad credit mortgages that are designed specifically for those with poor credit reports.
Nothing goes for nothing. Getting a mortgage with a not-so-good credit file would usually require you to fulfil extra requirements, such as paying higher interest rates or paying bigger initial deposits.
Finding Mortgage Deals for Low Credit Scores: Top Brokers
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 8.4 | Visitunbiased.co.uk | ||
 | 7.0 | Visithabito.com | ||
 | 7.5 | Visitcharcol.co.uk | ||
 | 8.5 | Visitbetter.co.uk | ||
 | 6.8 | Visitmojomortgages.com | ||
 | 6.9 | Visittembomoney.com |
Best UK Mortgage Brokers Reviewed
Find below a detailed review of each of our picks for bad credit mortgages in the UK:
Unbiased: Best for multiple broker access and expert advise
Habito: Best for market range
John Charcol: Best for expert mortgage service
Better.co.uk: Best for online use
Mojo: Best for fast mortgage processing
Tembo: Best for first-time buyers
1. Unbiased: Best for Multiple Broker Access and Expert Advise
Location & Coverage | Nationwide |
|---|---|
FCA Reg No | 581304 |
Experience | Over 500,000 customers helped |
Services | Commercial mortgages, first time buyer mortgages, remortgages, but to let mortgages |
Unbiased’s unique offering is its very extensive range of mortgage products and financial advisors – there are over 27,000 advisors that can provide you with comprehensive financial advice and help you choose from over 20,000 mortgage products Unbiased lists.
Using unbiased for finding advisors itself is free. However, an advisor can either offer you a free service or request you to pay a fee. The firm does the work of matching you with an advisor based on your needs.
You are, however, not obligated to use that advisor and you can do a rematch. You can also choose to browse for advisors by using filters such as your location and your specific mortgage needs.
- Free service
- In-person interaction with advisers and mortgage lenders
- The site provides lots of detail about each advisor which helps you make the right choices
- The site is easily navigable and user friendly
- Advisors may require additional payments
- Lack of transparency in advisor fees
- The extensive process slows down the experience
- Advisers pay to rank first in searches, so high-ranking advisers are not necessarily the best ones
2. Habito: Best for Market Range
Location & Coverage | Online |
|---|---|
FCA Reg No | 714187 |
Experience | Over 500,000 customers helped |
Services | First-time buyer mortgages, remortgages, buy to let mortgages |
Habito is popular for several things: its strictly online but efficient system for managing clients’ financial processes from mortgages to investments and pensions; its extensive mortgage service featuring over 90 mortgage lenders and a 20,000 product range; zero brokerage fees; excellent customer service; and many more.
Irrespective of what your credit history says, Habito can offer you expert advice and also link you to bad credit mortgage lenders easily, quickly, and for free. The company also offers a free mortgage calculator service that can help you estimate how much you’d be able to borrow with your unique circumstance.
Habito’s services are strictly online. Yet, the process of applying for a mortgage will enable you to speak to an experienced adviser through online chat or over the phone so you can better discuss your situation.
- Zero brokerage fees apply
- All of your processes are easily managed online
- Access to extensive mortgage lender options
- Fast response time
- It can be harder for the algorithm to find you a good fit if you have a complicated financial situation
- No physical or in-branch mortgage service available
- Need to scan documents online
- No hands-on assistance
3. John Charcol: Best for Expert Mortgage Service
Location & Coverage | Over the phone |
|---|---|
FCA Reg No | 665649 |
Experience | Over 500,000 customers helped |
Services | Commercial mortgages, buy to let mortgages, remortgages, first-time buyer mortgages, moving house mortgages, expat mortgages, bridging loan mortgages |
John Charcol prides on its long-standing existence as a mortgage broker offering expert services in the UK for more than 40 years. Its customers agree with this too and most persons who have used John Charcol for their mortgage needs report excellent and expert mortgage service, ease of use, expert advising, and speed.
The major drawback to John Charcol’s services is the fees charged. Not only does John Charcol charge fees compared to others listed here, the fees are also fairly expensive, going as high as £700 or more depending on the severity and complexity of your circumstance.
John Charcol, however, boasts over 100 extensive lender list that will help you find the right lender irrespective of what your credit history looks like. There’s also expert help available for clients with adverse unconventional credit conditions.
- Access to extensive mortgage lender options
- Very fit for those with irregular income, adverse credit history and other complex mortgage needs
- Extensive specialist mortgage products are available
- Works with established and credible lenders
- Expensive service fees
- Phone-based service alone.
- Only deals available to intermediaries are shown
- Application process is relatively slow
4. Better.co.uk: Best for Online Use
Location & Coverage | Online |
|---|---|
FCA Reg No | 924229 |
Experience | Over 100,000 customers helped |
Services | First time buyer mortgages, remortgages, buy to let mortgages |
Better.co.uk, formerly Trussle, is the UK’s first online mortgage broker. It offers the best online service available featuring a very fast response time (with an adviser reaching out within 24 hours), over 90 mortgage lenders, and zero brokerage fees. It is also one of the few top mortgage brokers that would link you up to deals despite an adverse credit report.
Better.co.uk does not work with direct-only providers, so you should double-check that a deal is truly ideal for you before signing up for it. Also, you are a good fit for Better.co.uk only if you’ve had a clean credit history in the past 6 years. That is, all of your adverse credit circumstances such as bankruptcies, home repossession, or individual voluntary agreement (IVA) shouldn’t date earlier than 6 years ago. Better.co.uk, however, allows you to compare deals and requirements across various lenders so you can see at a glance what lender would be best for you.
- Zero brokerage fees apply
- All of your processes are easily managed online
- Access to extensive mortgage lender options
- Fast response time
- No physical or in-branch mortgage service available
- It does not work with direct-only providers, only intermediaries
- Adverse credit mortgage seekers may be subject to paying a fee
- Adverse credit history circumstances should be dated back at for least 6 years
5. Mojo: Best for Fast Mortgage Processing
Location & Coverage | Online |
|---|---|
FCA Reg No | 478215 |
Experience | Over 7,000 customers helped |
Services | Commercial mortgages, first time buyer mortgages, remortgages, but to let mortgages |
Mojo has a free, easy-to-use mortgage brokerage service that lets you search for, select and chat with advisors and mortgage lenders. You may also opt for an office visit with an adviser or lender if you want to. It is also very easy to get a mortgage in principle from Mojo, taking as little as 15 minutes from your application time to get a quote and an advisor who reaches out to you.
- Zero brokerage fees apply
- You can get your mortgage in principle in just 15 minutes
- All of your processes are easily managed online
- Deals are picked from and compared from the whole market
- Customer reviews are not as great as that of other providers
- Not suitable for complex mortgage needs
- Mojo does not provide in-branch or phone service
6. Tembo: Best for First-Time Buyers
Location & Coverage | Online |
|---|---|
FCA Reg No | 952652 |
Experience | Over 50,000 customers helped |
Services | Commercial mortgages, first time buyer mortgages, remortgages, buy to let mortgages, guarantor mortgages |
Voted the UK’s Best Mortgage Broker by the British Bank Awards, Tembo has unique features that make securing a mortgage for first-time buyers quite easy. There are options for increasing your deposit, and even increasing the amount you can borrow, so that funds won’t be a limit for purchasing your first house or that big home you desire to get. They also offer advice for your unique first-time buyer and adverse credit needs, such as lower incomes or smaller deposits.
Tembo has two main options for helping you make bigger deposits for your mortgage: the Income Boost and the Deposit Boost, both of which involve your friends and family helping you to accrue a bigger deposit so you can meet requirements.
Mind you, Tembo can do all of the job for you – if you want. They can help you select a favourable mortgage, buy the home for you, or help you switch your deal if that is what you are looking for.
- Help to complete your home-buying process from start to finish
- Tembo’s features are specifically favourable for first-time mortgagers
- There are extensive mortgage products to choose from
- All of your processes are easily managed online or over the phone
- Brokerage fees apply and fees can go as high as £499 to £999
- No in-branch service option available
How Do We Rate and Review Providers?
There are several brokers out there acclaimed to be offering bad credit mortgages. Out of the extensive options, we have selected top picks after making several considerations. Here are the top factors we considered for rating providers:
Product Offerings and Lender Options – We didn’t just select brokers that seem to offer nice mortgage deals, we particularly carefully selected brokers that allow you to land adverse credit mortgage deals and will link you to bad credit mortgage lenders. We also selected brokers with extensive lender and product options so that you will never be short of choices.
Response Time – Most of the brokers we picked offer their services online. A swift response time is therefore an highly important feature to consider. Most of the brokers will attend to your needs within 15 minutes to 24 hours, granting you your quote or mortgage in principle and matching you with a best-case adviser.
Customer Service – We looked at what past clients have to say about each broker and selected only those with excellent and relatively fair customer reviews and ratings.
Unique Features – We looked for unique features mortgage brokers might have to offer such as booster services for clients with adverse credit, expert advising and zero brokerage fees.
What is a Bad Credit Mortgage?
A bad credit mortgage is a special kind of mortgage service made available for borrowers with an adverse credit report or poor credit history. Bad credit mortgages are also referred to as adverse credit mortgages and mortgages for low credit scores.
How does a bad credit mortgage work?
A bad credit mortgage works similarly to a traditional mortgage but with certain adjustments. A lender is going to assess your credit history and will look out for the severity of factors such as late payments, defaults, high debt-to-income ratio, or bankruptcy to determine if they would be willing to lend your money and on what terms they would give you a loan.
If you have bad credit, it is best to work with bad credit mortgage lenders instead of conventional lenders. The former tend to wink at your low credit score. The latter, however, consider the severity of certain factors like your age, the specific cause of your adverse credit history, and how likely such situations are likely to reoccur to decide if they will offer you a mortgage.
The most apparent characteristics of a bad credit mortgage are:
High-interest rates
Bigger deposit requirements
Shorter loan terms, and
Extra consultation and advising fees.
Mortgages for low credit scores are also rarer to find, especially those with high loan-to-value ratios (smaller initial deposit requirements).
Why are their rates high?
A mortgage lender needs to be able to discern your ability to pay back the loan you borrowed to purchase a home. A bad credit history reduces lenders’ trust in you as they would think you might not be able to pay back your loan. They, therefore, request bigger deposits and higher interest rates in order to be able to offset the loan amount as quickly as possible.
Mortgage lenders would usually check your credit history before agreeing to lend you a loan to purchase a home. Even when a lender doesn’t consider your credit score, your credit history is an important factor they consider. Your credit history is assessed in two major ways: through an automatic credit check immediately after you apply, and through a hard credit check after you agree to a mortgage option.
The automatic check is a soft check, and will not reflect in your credit history. The hard check, however, is a detailed check into your credit report and appears on your credit file.
What are the main causes of a bad credit rating?
Several factors can contribute to a bad credit report. Here are some of the main causes and how crucial they are:
Severity | |
|---|---|
Late or missed payments | Moderate to severe |
High credit card balances | Moderate |
Defaulting on loans | Severe |
Bankruptcy or foreclosure | Severe |
Too many credit applications | Moderate |
Lack of credit history | Mild to moderate |
Debt collections and judgments | Moderate to severe |
Eligibility Criteria for Bad Credit Mortgages
Although different mortgage lenders might have unique requirements, there are usually three distinct eligibility criteria considered for offering anyone an adverse credit mortgage. These are:
The date the adverse credit was registered – The older your adverse credit history was filed, the higher your chances of getting a mortgage. Lenders would usually place a threshold on how early your bad credit history has to be to qualify for a bad credit mortgage.
The reason for your bad credit – Mortgage lenders will also review the reason for your bad credit. An unexpected unfavourable occurrence, for example, is more likely to be overlooked than other bad credit histories that are caused by carelessness and lack of proper financial management skills.
The type and severity of the issue – It would be harder to find willing mortgage lenders with very severe cases like bankruptcy compared to miss payments and overdue loans.
After a case of bankruptcy, you would usually have to wait for a minimum of twelve months to be eligible for applying for a mortgage. Many bad credit mortgage lenders even demand a longer time and would like to see evidence of good credit history since the bankruptcy occurred before they lend you money.
Other eligibility factors a lender might assess in our adverse credit application include your age, income level, and the type of property you want to borrow.
How to Get a Mortgage with Bad Credit
As we have already explained, a bad credit report or history does not imply an inability to get a mortgage. Here are the steps you should follow to get a mortgage for a low credit score:
Download your credit report to scout for and identify mistakes and potential concerns in your credit history
Build up and optimise your credit score
Save for a bigger deposit
Get a guarantor
Find a specialized bad credit mortgage lender fit for your unique credit situation and specific mortgage needs
Speak to one of the broker’s advisers for expert help on your situation
Finding mortgages for low credit scores is harder mostly because of the higher risk perception. Lenders view borrowers with bad credit as higher-risk applicants. A poor credit history indicates a higher likelihood of missed payments, defaults, or financial instability.
Lenders are cautious of this and would be more reluctant to lend money to those with adverse credit files. Other reasons why it is difficult to get a mortgage with bad credit include the larger deposit requirements, higher interest rates charged, and stricter qualification criteria applied.
Deposit requirements
Deposit requirements for conventional mortgages usually range between 5% to 15% on the lower end of the spectrum. It is rarer to get such low deposit requirements for bad credit mortgages and lenders will tend to favour you only if you are willing to put forward a higher deposit.
How much you can deposit would also depend on the severity of your case. Less severe situations like individual voluntary arrangement (IVA) might require you to deposit between 10-25%, bankruptcy cases would usually require you to deposit between 15-25% while more severe cases like repossession would require you to deposit up to 25% and above.
100% loan-to-value (LTV) ratios or no-deposit mortgages are generally rare, and almost impossible to get with a bad credit history. The higher you are willing to deposit, the better for you if you have a bad credit report.
What documents do I need?
When applying for a bad credit mortgage, you’ll generally need to provide similar documentation as you would for a traditional mortgage application. However, due to your bad credit history, lenders may scrutinize your financial situation more closely. Here are the common documents you’ll likely need to gather:
Identification documents, such as a valid driver’s license, passport, or other government-issued ID
Proof of income, such as tax returns, pay stubs, or profit and loss statements and bank statements if you are self-employed
Employment verification, such as a letter from your employer, employment contract, or recent bank statements showing regular income deposits from your employer
Proof of assets such as real estate documentation, bank statements, and retirement accounts
Credit history documentation
Additional documents such as rental history, proof of child support or alimony, divorce or separation papers, bankruptcy or foreclosure discharge papers
Conventional mortgage providers will let you secure a loan to buy a home with a credit score of about 620 or more. Most conventional lenders will not go beneath that. It is still possible, however, to find mortgages allowing you to secure a home even with a credit score as low as 500. The lower your credit score, the harder it becomes for you to find a lender willing to offer you a mortgage.
Should I Apply for a Mortgage with Bad Credit?
You already know that you can apply for a mortgage despite a bad credit report. Choosing to apply for a mortgage or not is, however, something you must carefully decide on. Look at the urgency of your need for your mortgage and consider if you can wait for some more time when your credit history will have a lesser effect.
You should also consider what you can currently afford as a deposit and would continually be able to afford as payment to cover the loan.
Using a mortgage broker is highly beneficial when seeking a mortgage with low credit. A broker grants you access to specialised lenders offering bad credit services and would be less stringent in their criteria.
You also benefit from mortgage brokers’ expertise and guidance and the time and stress they save you from doing the work of finding a suitable lender yourself. Note, however, that mortgage brokers and advisers can charge fees for their services. Also, not all brokers are credible so you must do a diligent check on the credibility of a broker or suggested lender before choosing to work with them.
