Published 19 May 2012 · Older article
Mortgages for ex bankrupts, people with CCJs, Defaults and even past IVAs we can help
Getting a mortgage if you have a bad credit profile has been very difficult since the ‘credit crunch’. Lenders are more protective of their funds and are selecting customers with a good credit rating to lend to first and foremost. However, whilst the lenders all like to believe they are world-beaters on rate many fall short of their targets and cannot obtain the critical mass or margin they seek, and it is this space that we actively utilise. We help applicants with county court judgements (CCJs), defaults, arrears, individual voluntary arrangements and discharged bankrupts, and we do NOT charge an upfront fee for our service.
Bad credit mortgage options change often. At Niche Advice we wholeheartedly believe the finance should be ready to go before you begin the search for the property. This never more true if you have had credit problems in the past otherwise you may get false hopes up. We can normally obtain a formal decision from the lender that will advise the maximum they will lend you based on your credit profile, giving a clear steer on the price bracket you should be able to buy at. The decision can last for a few months depending on the adverse credit lender we secure leaving breathing space and confidence to negotiate with the vendor.
Lender criteria for county court judgements (CCJs), defaults, arrears, individual voluntary arrangements and discharged bankrupts change often, so we are happy to talk through your individual circumstances. For an overview, see our main bad credit mortgage guide.
If you are researching adverse credit mortgages online, check the date of anything you read: lender criteria change often.
What lenders look at
Every lender sets its own rules on adverse credit and those rules change often, so rather than a fixed table the answer depends on your own credit file. The points that usually decide which lenders are realistic are:
- The type of issue – missed payments, defaults, CCJs, arrears, IVAs and bankruptcy are each assessed differently.
- How recent it is – lenders look most closely at the last few years, and a clean record since helps.
- Whether it has been settled – satisfied CCJs and defaults are generally viewed more favourably.
- The amounts and how many – a single small issue is treated differently from repeated or larger ones.
- Your deposit – a larger deposit or more equity usually widens the choice of lenders.
Frequently Asked Questions
Question 1:
Q: My bank has rejected my mortgage application due to CCJs, arrears and defaults can I still get a mortgage?
A: Quite possibly. It depends on what is on your credit file, how recent it is and whether it has been settled, and you would still need to meet the normal mortgage checks such as secure and stable finances and income.
Question 2
Q: I have been in an IVA in the past few years can you get me a mortgage?
A: Possibly. It depends on the lender, how the IVA has been conducted and whether it has been completed. If the IVA has been settled it’s important that you maintained a good credit record since.
Question 3
Q: I have been made bankrupt. The bankruptcy included a repossesion can I get a new mortgage?
A: Repossessions settled by bankruptcy do restrict lender choice but are not insurmountable. Lenders usually want the bankruptcy to have been discharged for some time and there must be no ‘over-hang’ of a repayment or charge to the lender. Further note, repossessions outside of bankruptcy proceedings are not something we can help with.
Question 4:
Q: Can I obtain a mortgage to purchase my Right-to-Buy if I have had bad credit?
A: Some lenders will consider a Right to Buy purchase after past credit problems, but the criteria are stricter, so we check the options lender by lender.
Question 5:
Q: Can I use a government or shared ownership scheme if I have had bad credit?
A: It is harder. Lenders active in shared ownership and similar schemes generally look for a clean recent credit history, so we would review your credit file first.
Question 6:
Q: I had some CCJs last year how does that affect my chances of getting a mortgage?
A: The size of the judgment, number of judgments, whether they have been satisfied, or registered correctly or in error all have a bearing on the acceptance. We have placed mortgages with CCJs of the size of nearly £20,000 but it depends on the rest of your circumstances.
Question 7:
Q: I had some late payments on credit cards and catalogues how does that affect my chances of getting a mortgage?
A: Recent missed payments make acceptance harder. The older they are, and the better your record has been since, the more your chances improve.
Question 8:
Q: What sort of mortgage rates can I expect for bankruptcy mortgage?
A: Rates for these mortgages are usually higher than mainstream rates to reflect the risk; we will show you the actual options available for your case.
Question 9:
Q: What are your charges?
A: My fee is 1%, £1000 min on all complex mortgages. I only charge this once the mortgage has completed. This is uncommon as brokers tend to charge fees upfront or on Offer, personally I don’t think it’s a fair system to operate this way. So just to be clear if you don’t get your place I don’t get paid.
Question 10:
Q: What is the process of getting a bad credit mortgage?
A: i) Make an enquiry through our contact page. I will then get in touch to ask for some more information about the case.
ii) Please supply an up-to-date credit file report (link at the bottom of this page).
iii) I will email over information about the products, rates and fees. Once you’re confident you would like to go ahead:
· I’ll gather more information about yourself and ask fore supporting documents to help with the mortgage process such as pay-slips, bank statements and IDs to submit to the lender.
· The lender will assess the case and if happy will instruct valuation of the property.
· Upon successful valuation an offer is produced by the lender.
· Applicant will agree with the Offer and will commence the legal work.
· Properties will exchange and then subsequently complete.
(Please make sure you also have an up-to-date credit report ready to share with us when you get in touch. Check your credit report)