Applying for a ‘bad credit mortgage’ is similar in many ways to applying for a ‘regular mortgage’ or a ‘high street mortgage’. However, there are usually a number of key differences dependent on the severity of the ‘bad credit’ involved.
Most ‘specialist lenders’ who offer ‘bad credit’ mortgages will only deal with specific mortgage advisers with whom they have an existing relationship, that’s why it’s so important to make sure you are dealing with a specialist mortgage adviser who has access to these ‘specialist lenders’ and is comfortable with the qualifying criteria and the type of things they want to see.
The application process
Once you have found a mortgage adviser who is comfortable dealing with these type of bad credit mortgages you can expect to provide the usual documentation you would when applying for a ‘high street mortgage’ such as:
- Photo ID (passport / U.K. Driver’s license)
- Proof of address (recent postal bank statement/council tax bill etc)
- Proof of earnings (recent payslips / SA302’s/ Financial accounts etc)
- Recent bank statements (usually latest 3 months)
- Proof of deposit (bank statement/pensions statement etc)
Dependent on the severity of the ‘bad credit’ you may need to provide more documents and information than you would a ‘high street mortgage’, the more severe the ‘bad credit’ the more documents and information you can expect to provide. This may be things such as:
- Written explanation as to why the incidents of ‘bad credit’ occurred and the dates that the incidents of ‘bad credit’ occurred.
- Written explanation as to how this has been resolved and what measures have been put in place to ensure the incidents do not occur again
- Older bank statements (up to 12 months’ worth)
Your specialist mortgage adviser will be able to help with things such as this and will be comfortable with what these ‘specialist lenders’ will expect to see. Once you and your ‘specialist mortgage adviser’ have gathered all the required information and documentation, the application will be submitted on your behalf and sent off to be looked at by the underwriter.
Whether you are buying for the first time or moving to your ‘forever home’ the home-buying process can be a stressful time for everyone. Getting the right mortgage advice from the outset can help take the stress away leaving you to sort out the more important things like picking out the sofa or choosing between a games room or a dressing room.
How much can I borrow?
The rule of thumb is that most Lenders will lend between four and four and a half times your annual income. However, a Specialist Mortgage Adviser may be able to achieve more than this as they have access to contacts and Lenders that the public do not. They may also be able to leverage their relationships with certain Banks and Building Societies to help achieve a mortgage that at first didn’t seem within reach.
How much should I expect to pay in mortgage advice fees?
This is the good part. Typically, mortgage advisers will charge upwards of £500 in ‘advice fees’ or ‘broker fees’ on what would be deemed ‘straight-forward cases. However, at My Mortgage Finder, we will provide you access to our bespoke, Specialist Mortgage Advisers on a ‘fee-free’ basis, providing you meet the qualifying criteria.
Finally, who should I use?
Davis Wealth Management provides direct access to our recommended Specialist Mortgage Advisers ‘My Mortgage Finder’. You can be assured that you will be in safe hands and looked after on a ‘fee-free’ basis (qualify criteria applies) as part of the Davis Wealth Management service. We have of course carried out all the due diligence on My Mortgage Finder, however, feel free to check them on their website and social media pages below. Alternatively, speak to the Davis Wealth Management team today and they’ll arrange for one of their friendly advisers to get in touch.
Meet Kate. Kate fell on hard times when she was made redundant 3 years ago. Kate has 2 Defaults and a County Court Judgement registered on her credit file. She was also forced to enter into a Debt Management Plan that she finished paying off just over 1 year ago.
Kate is back on her feet and has found a new job. She is now looking to buy her first home with her boyfriend Ash, but is worried about her financial problems from the past. Kate and Ash were recommended a mortgage adviser by Ash’s Mum who helped her to remortgage last year.
Kate and Ash made an appointment at the mortgage advisers office for the following week. But they were left heartbroken after being told that banks and building societies didn’t like this level of ‘adverse’.
Kate and Ash thought their dreams were over and didn’t know what to do…
My Mortgage Finder to the rescue…
Kate saw an ad for ‘My Mortgage Finder’ on Facebook who claimed to offer specialist advice for people who’ve been turned down for mortgages in the past.
Although Jack knew the high-street lenders wouldn’t be able to help Kate, he used his contacts to find Kate a specialist lender who were prepared to help.
Kate and Ash are now the proud owners of their first home. Kate and Ash bought their home for £250,000 and pay an interest rate of 3.6% on a mortgage of £200,000. Their monthly mortgage payments are £838.21 which are fixed for a period of 2 years.
Meet Tom. Tom has two County Court Judgements registered against him for an amount totalling £5,970. These were both paid off less than a year ago and both still show on his credit report. He is also worried about his very low credit score.
Tom has been trying desperately to get a mortgage. However his own bank said they couldn’t help him and after a similar conversation with a local mortgage adviser Tom was at a loss leaving him upset and frustrated!
Tom spoke to his friend Jonny who recommended he speak to My Mortgage Finder who had helped him in a similar situation.
Lucky for Tom My Mortgage Finder are specialists in “bad credit” lending …
Tom called My Mortgage Finder the same day. After a 15 minute chat with AJ, one of the friendly advisers, Tom was left feeling hopefully that his dream home may actually be achievable after all
Tom had one more 30 minute chat with AJ on the phone and received his mortgage offer inside two weeks. Six weeks later he picked up the keys to his brand new flat.
Tom is now the incredibly proud owner of a flat worth £265,000. Tom pays an interest rate of 3.44% after putting down a deposit of 5%. Tom’s monthly repayments on his mortgage are £885.