Can you get a mortgage with bad credit? Despite common belief, you can get a mortgage with a bad credit score. A bad credit mortgage, which is sometimes also called a subprime mortgage or an adverse credit mortgage, depending on the lender, is a special type of mortgage for those with:

• Poor credit history
• Low credit scores

These special mortgages can help those with poor credit history get a mortgage, especially if they’ve struggled to get one in the past.

Bad credit can either be due to a short or limited credit history or low credit scores. While there’s no guarantee, a mortgage broker for bad credit may be able to help you find mortgage options even if you have:

• • Defaulted on a loan
  • Been issued a County Court Judgement (CCJ)
  • An individual voluntary arrangement (IVA)
  • Filed for bankruptcy
  • Missed repayments on loans or credit cards

Mortgages for bad credit can help you finally purchase a home and get your foot up the property ladder, but they may not be right for everyone (even if you can apply). This is because mortgages for bad credit:

1. Have higher interest rates: While using a bad credit mortgage advisor can help you find the best available interest rates, that doesn’t mean that the interest rates won’t be higher than if you had a good credit score.
2. Require higher deposits: These bad credit mortgages typically require higher deposits, so you’ll need between 15 to 30% on average of the property’s value to get a home.
3. Are rare: Fewer lenders offer mortgages to those with bad credit, so you won’t have a large number to choose from even if you use a mortgage broker bad credit history

You’ll want to use a mortgage broker bad credit home loans specialist to help you understand your options and limitations, and then to help find the available mortgage product offers.

You’ll still need to pass affordability checks, which means your incomings still need to be greater than your outgoings. You will also need to prove that you are financially stable, even with debts.

There are three types of bad credit mortgages that mortgage brokers for bad credit could get you.

1. Fixed-rate: You agree to a fixed interest rate for a set number of years, usually 2, 3, or 5). You have consistent monthly payments during this time.
2. Variable-rate: You’ll need to pay the standard variable rate, which may increase or decrease.
3. Tracker mortgage: The interest rate you pay tracks the Bank of England base rate, with an added profit margin for your lender, so your rates can change.

Can I get a better mortgage later?

Yes, if your credit score or history improves after you get a bad credit mortgage you can remortgage to a better rate.