Finding Mortgages for Low Credit Scores

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.

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.

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.

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.

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.

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.

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.

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.

Several factors can contribute to a bad credit report. Here are some of the main causes and how crucial they are:

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.

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