Your Must-Read Guide
Want to buy a home but have a less-than-perfect credit score? You don’t have to give up hope! Here are five tips to help you secure a bad credit mortgage, helping you finally achieve your dream of owning your own home.
Understand Your Credit Situation
Before applying for a mortgage, it’s important to have a full understanding of your credit situation. Start by obtaining a copy of your credit report and make a list of all debts you owe. You should also look for any late or missed payments, along with any inaccuracies that could unfairly lower your score. If you spot any errors, contact the credit agency to have them corrected. Doing all of this can give you a clear picture of what lenders see and help you address any issues before applying.
Improve Your Credit Score
While it’s possible to get a mortgage with poor credit, improving your score can increase your chances of securing the best possible terms. Doing the following will help you to start to turn things around:
Pay off outstanding debts
Set up direct debits
Reduce your credit utilisation
Register on the electoral roll
Avoid new credit applications
Improving your credit score may take time, but even the smallest improvements can make a big difference.
Save for a Larger Deposit
One of the most effective ways to secure a mortgage with poor credit is to save for a larger deposit. Having a deposit of 15% or more can significantly improve your chances of approval. Why? Well, a larger deposit reduces the lender’s risk and may also qualify you for better interest rates – even with your bad credit. So, put away as much money as you can on a regular basis, but don’t neglect paying off your debts.
Work with a Specialist Mortgage Broker
Trying to find a mortgage with poor credit can be daunting, which is why working with a specialist mortgage broker can be a game-changer. They will have relationships with lenders who specialise in bad credit mortgages, raising your chances of success right away. They will then assess your financial situation and recommend the most suitable options for your needs.
Brokers can negotiate on your behalf to secure the best terms possible, and they will handle all of the paperwork too. Best of all, many only charge a fee if they successfully secure a mortgage for you!
Put Together a Strong Application
When applying for a mortgage with poor credit, presenting a strong application is essential. You’ll need to have documentation such as proof of income, bank statements, and records of any savings or investments you have. If you are able to prove that you have been in stable employment with regular income over a significant period, this will serve you well too. Working with a broker comes in handy in this regard, as they will be able to look over your application before submitting it to potential lenders.
What Next?
Getting a mortgage with poor credit may require more effort, but with the right approach, it’s definitely achievable. So, why not get in touch with a trusted mortgage broker today to find out more?