Struggling to get a mortgage

More and more people in the UK are struggling with debt and are finding it increasingly difficult to maintain their payments.

Obtaining a mortgage when you have credit issues can be very difficult, and you may find that, without the help of a broker, your application will be declined.

The thing to remember is that each lender is different and just because you may have been declined by one lender, doesn’t mean you won’t be accepted by another. At Advantage, we have the experience and knowledge to help you if you have credit difficulties. 

Despite what you may have been told by other lenders, friends, or even other mortgage brokers, it is possible to obtain a mortgage if you have had any of the below. But, this does depend on other factors. For example, you are far more likely to obtain a mortgage as a bankrupt if you have a 40% deposit and you were discharged three years ago, than if you have a 5% deposit and were discharged this year. The success of a mortgage is all about how multiple factors come together, which is why speaking to an independent broker is so crucial.

No credit history or low credit score

Payday Loans

Late payments

Missed mortgage payments

Defaults

CCJ’s

Debt Management Schemes

Repossessions

IVA’s

Bankruptcy

So, what’s the answer?

Firstly, ignore your score!

If you have viewed your credit report and seen a low number and the meter in the ‘red’, don’t fret. Fortunately lenders don’t really use this number. Here’s what goes on behind the scenes…

Credit Scoring vs Credit Searching

When applying for a mortgage, lenders will assess your credit history considering what happened, when, for how much etc. Most main stream lenders will have a computer do this automatically, awarding points for things they deem as positive and deducting points for negative patterns of credit usage. This forms the Credit Score mortgage brokers talk about, not the number on your credit report and it is done by the lender behind the scenes. With most high street lenders, if you don’t achieve a high enough score during this process, the lender declines and you cannot progress to full mortgage application. This is a frequent reason why people with previous credit issues hit a brick wall with high street lenders.

As the phrase goes, ‘computer says no’…

However, some smaller, more specialist, lenders are only interested in your History, and don’t perform a Credit Score. Instead a human at the lender views your credit report manually, to see if you fit their (typically more) flexible criteria and potentially apply discretion even if you don’t.

There are plenty of specialist lenders who are generally more accommodating than the high street. That said, their rates are higher and some high street lenders have, slightly hidden, lesser known tolerances for past credit history, which are often form great success stories for our clients.

What do I do next?

If you haven’t done so already, it is always advisable to obtain your Credit Report in advance, as the information contained within the report is what the lender will base their searches on.

Different lenders use different Credit Reference Agencies, therefore it is sometimes difficult to determine which one is accurate. At Advantage, we recommend Check My File as our preferred report provider, as it will show multiple results allowing you to get a full picture of how lenders are likely to assess your application.

In order to obtain your report, click on the below link to get a 30 day free trial with CheckMyFile and download your report:

Click here to get your free credit report

If you have applied for a mortgage and have been declined by the lender, or you simply have some concerns about your current credit situation, we are more than happy to speak to you and help set a plan forward.

Click “book a consulation” below for a no obligation chat.

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