Getting a mortgage – with a poor credit rating

How to get a mortgage if you’ve a poor credit rating

Having a poor credit rating can hinder many people trying to get a mortgage for a new house. This is still the case even when you’re able to put down a significant deposit or have a good salary. However, having a poor credit history doesn’t necessarily mean it’s impossible to get a mortgage.

Before anything else, check that your credit rating is correct. You can do this through contacting credit agencies such as Equifax and Experian who, for a fee, can check your credit file. They can close credit accounts no longer in use or that are paid off. They can make sure you’re on the electoral roll and search for other errors. Getting these errors corrected may mean a mortgage is immediately more accessible to you.

If you do have debts then show your lender you’re actively managing those debts. You can do this through paying off your present debts as best you can as well as make sure all present bills are paid on time without fail. Get together all your payslips and bank statements in order to show them to any potential mortgage lender.

You can search for certain lenders who specialise in helping people with a poor credit history get a mortgage. However, be aware that these mortgage lenders, sometimes known as sub-prime lenders or adverse credit lenders, usually charge much higher rates of interest.

You can still get a mortgage with a poor credit rating but you may also be asked to put down a bigger deposit. This could be as around 30% or more of the property’s value. Shop around and you should be able to find some mortgage lenders willing to give you a mortgage in spite of your poor credit history. It’s also very helpful to enlist the help of a mortgage broker or an independent financial advisor.

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