Do you live in Northamptonshire? Are you a first time buyer or a next time buyer? But what do you do if you have a bad credit score? A lot of people believe that having a bad credit score can affect their ability to get a mortgage and purchase a property. But you can find a mortgage on bad credit, a bad mortgage rating doesn’t have to stop you from being able to purchase a property.
Bad credit mortgages are a way to purchase a house while having a bad credit score. Sometimes your credit score could be damaged by bad financial decisions and management, but it could be because of circumstances beyond your control. This is why it can be unfair when your mortgage rating is affected by bad credit.
But, it’s important to understand that a bad credit mortgage doesn’t mean you can miss repayments. If you cannot afford to pay your mortgage lender back, your new property may be repossessed. It will also be extremely difficult for you to find another mortgage again. But if you can afford the repayments, a bad credit mortgage can be a great opportunity to take a step on the property ladder.
What is a Bad Credit Mortgage?
A bad credit mortgage is a mortgage agreement designed for people with a bad credit rating. Typically, the interest rates on this type of mortgage will be higher than with a normal mortgage agreement. If you can find the right lender, a bad credit mortgage can be beneficial in the long term. This is because a mortgage gives you the chance to make repayments that improve your credit score – as long as you keep up with your mortgage payments.
If you have a bad credit score, taking out a mortgage could be the wrong decision. Repaying a mortgage, especially one with a high-interest rate, is a big financial commitment. However, sometimes your credit score may not reflect your financial situation or ability to make repayments. That’s where our team at Mortgages MK can help you to find the right mortgage for you.
Why Has My Credit Score Reduced?
- Late or missed payments
- County Court Judgements for missing bill payments
- Lack of credit history
- Debt
- Applying for a lot of credit at once
- Being linked to someone with a bad credit rating through a joint mortgage, mortgage application or bank account
If a lender is unhappy with your mortgage rating, they could restrict your borrowing, increase your potential interest rates or reject your mortgage application entirely. So, what do you do if your mortgage application is rejected? For a bad credit mortgage in Northampton, our team can help.
How Do You Improve Your Credit Score?
- Paying bills, credit agreements, and credit card repayments on time or early
- Owning a house or living at the same address for more than a year
- Being on the electoral register
- Being in the same job for a long time
Challenges for those with Bad Credit
Rejection
When it comes to securing a mortgage, if you apply to a lender who isn’t happy with your credit score, they may reject your application altogether leaving you with the frustrating task of searching for another potential lender and repeating the application process.
Restricted Borrowing
Mortgage providers may agree to lend to you but offer less borrowing than you require. Unless you can find additional funds or negotiate a lower buying price, sadly this may leave you unable to complete your house purchase.
Higher Interest Rate
The most competitive interest rates will require a good credit score. Often the rate advertised will be a representative APR. This rate will not be offered to everyone and with a low credit score, your personal APR could also be much higher.
Can you get a Mortgage with Bad Credit?
Yes, with the right mortgage advisors, you can get a mortgage with bad credit. You may be ruled out of borrowing from some lenders, however, there are opportunities available that will allow you to purchase your dream property. Our team of mortgage brokers will work with you to secure you a bad credit mortgage in Northampton, with as few disadvantages as possible.
If you have bad credit gaining a mortgage will be more challenging. Here are some ways you can improve your credit score:
- Use a credit checking agency such as Experian to see your credit report.
- Consider trying to boost your score before applying for a mortgage. For example, ensure you’re on the electoral register, make sure all your bills are paid on time, or if you have a lack of credit history, start using a credit card and repaying the balance in full on time each month.
- Check your credit score report thoroughly for any mistakes which could be lowering your score.
- Save, save, save. The higher the deposit you can find, the better. Ideally, you will need at least a 15% deposit to find a lender who will be flexible enough to consider someone with bad credit.
- Call us and we will search for a mortgage lender who will consider applications from someone with your credit score.
- Work to maintain a good credit score. Even when you have a mortgage your lender will regularly check your credit score which could result in a rise of the interest rate.
Bad Credit Mortgages in Northampton
At Mortgage MK, our team have in-depth knowledge of lenders across Northamptonshire including specialist mortgage lenders that are willing to consider applications from people with lower credit scores. Every mortgage lender is different, they will all have their own criteria and requirements. Working with our experienced team to find a mortgage lender in Northampton will give you the best chance of your application being accepted.
Our mortgage advisors will know the specialist bad credit lenders who will assess your application fairly. If there is a reason for a missed repayment that is affecting your mortgage rating, we can communicate this to the lender. This will ensure the lender understands the context around your credit score, giving you the best chance of having your application accepted.
Our team can also save you the stress of having to apply and be repeatedly rejected by lenders. Working with Mortgages MK will remove the stress of trying to secure a mortgage on bad credit. We will work hard to find the most appropriate lender for your circumstance to give you a chance of securing the mortgage you need.
Important Information on Bad Credit Mortgages
It’s crucial to understand that if you have a mortgage, your home may be repossessed if you don’t keep up your mortgage repayments. This doesn’t change if you have a bad credit mortgage. That’s why it’s important you only borrow what you can afford to pay back.
There may be a fee if you receive mortgage advice. The cost will vary depending on your circumstances. The fee is up to 1% of the amount borrowed but will typically be around 0.3%.
Contact Us Today
To discuss your mortgage options today, get in touch with one of our team. Give us a call on 01908 803362 or please fill in the enquiry form below.