Can You Get a Mortgage with Bad Credit?
Yes, it's possible to get a mortgage with bad credit, though your options may be more limited and rates typically higher than standard deals. If you're looking to remortgage with adverse credit history, specialist lenders exist who consider applications from borrowers with CCJs, defaults, missed payments, debt management plans, or even previous bankruptcies.
The mortgage market has evolved significantly, with many specialist lenders now focusing specifically on borrowers with imperfect credit histories. While high street banks may decline your application, these lenders take a more nuanced view of your circumstances and can often find solutions where others can't.
What Counts as Bad Credit?
Bad credit can include a range of issues: County Court Judgments (CCJs), defaults on credit agreements, missed payments on loans, credit cards or utility bills, Individual Voluntary Arrangements (IVAs), debt management plans, or bankruptcy. The severity impacts your options - recent issues or larger amounts are viewed more seriously than older, smaller problems.
Lenders look at how long ago credit issues occurred, the amounts involved, and how your credit behaviour has improved since. A CCJ from 5 years ago with an otherwise clean recent history is viewed differently to one registered last year. Each lender has different criteria, which is why working with a broker who knows the specialist market is valuable.
Which Lenders Consider Bad Credit Mortgages?
Specialist lenders like Kensington, Pepper Money, Precise Mortgages, and Bluestone focus on helping borrowers with adverse credit. These lenders manually underwrite applications, considering your full circumstances rather than relying solely on credit scores. They're accustomed to explaining credit issues and finding appropriate solutions.
The rates offered by specialist lenders will typically be higher than mainstream products, reflecting the additional risk they take on. However, as your credit history improves over time, you can remortgage again to access better rates. Many borrowers use a specialist mortgage as a stepping stone back to mainstream lending.
LTV Requirements for Bad Credit
Loan-to-value (LTV) requirements are often stricter for bad credit mortgages. While mainstream lenders might offer 95% LTV deals, specialist lenders may require you to have more equity, often limiting lending to 85% or 80% LTV depending on your credit issues. The more equity you have, the more options become available and the better rates you can access.
If you're remortgaging and your property has increased in value, you may find yourself in a better LTV position than when you first bought, potentially opening up more lending options despite your credit history.
Get Expert Bad Credit Mortgage Advice
Our FCA-regulated brokers specialise in finding mortgage solutions for borrowers with credit problems. We'll assess your situation, explain your options clearly, and match you with appropriate lenders. Complete our form for a free, no-obligation consultation and take the first step toward securing your remortgage.