Can I get a bad credit mortgage?

  • Can you get a mortgage if you have bad credit? A default or CCJ on a credit file is a common reason why a mortgage lender or bank will say no to your application.  Many of them do not allow for this form of bad credit entry in their criteria and will use this as the reason to say no to you. What options does that leave you with?

    There are probably two options are left to you.  The first is to allow for the default or CCJ to come off of your credit file.  Typically this is 6 years from the date that it was first put there.  Of course anything that comes along after this, such as a new default or missed payment will also count against you.

    The second is to speak to a mortgage broker or one of the banks that do allow for defaults within their product range.  Again each bank will have a different take on this but in the main, the default or CCJ needs to be two years old before the market starts to open up again for you.

    There are banks that will look at it sooner than 24 months. Your advisor will know which ones these are and whether your situation matches that of the lenders criteria. What if I pay the default off?

    Banks and other financial institutions like to see that all of your money commitments are in control.  They will see what you have outstanding on credit cards, loans and other finance.  The fact that you have responsibly paid off the default will be a positive factor in your favour, but it will still show as a default on your Experian or Equifax credit file, albeit paid off.  The same lenders that do not like to see a bad credit history will still decline you, and same lenders that you have been recommended, should still be able to offer you mortgage terms. How to find the right mortgage?

    The first thing to do is to get yourself some good advice.  Speak to a good specialist mortgage broker with access to all the lenders that allow for this type of averse entry on your file.

    Asking them to help you get a decision or agreement in principle will give you the confidence to move forward in your new property search or remortgage.

    And if getting a mortgage at this time is not possible because of your individual situation, then they should be able to work with you to get your credit file to a place where an application would be accepted.