Bad Credit Mortgages in Scotland

Looking for a bad credit mortgage in Scotland? The brokers we work with can help you get the best deal.

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No impact on your credit score

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 16, 2021

With the right planning and foresight, you can find your perfect home in Scotland – even if your credit score is less than favourable.

In this guide, we’ll provide you with information and tips on what lenders are looking for, how to build up your credit score, and how to land the best deal available. With the right advice and help from an expert broker, you’ll soon be on your way to securing your new Scottish home.

Can you get a bad credit mortgage in Scotland?

Yes, it’s certainly possible but it can be difficult depending on the severity, type and circumstances surrounding the reasons why you have a bad credit record.

Interest rates for bad credit mortgages are often higher, and some of these loans come with extra fees or conditions attached. You’ll have to provide proof of income or assets, for example, agree to an affordability assessment, and possibly even put in some work around your finances and improving your credit history before they’ll approve your application.

The important thing to remember, though, is that you do have options available to you, although these may not all be immediately visible and advertised by your standard high-street bank.

How should I apply?

If you’re interested in applying for a mortgage but you’re worried that your bad credit history may be a stumbling block, there’s a few simple steps you can take to improve your chances…

Step 1. Request an up to date credit report

First things first, have a look at your credit report and see how your score has been affected. You can also see what exactly is showing and whether any previous defaults have now cleared.

There’s a few different websites, such as Clearscore and Experian, that offer this service on a fee-free basis.

Step 2. Speak to an experienced mortgage broker

The smartest route to securing a mortgage, particularly if you have a bad credit record, is to work through a specialist bad credit mortgage broker who can give unbiased advice on available mortgages that suit your needs.

A broker will look at all of your financial information, including income, assets, debts and employment status before making any recommendations. They’ll also provide advice on filling out the paperwork required by lenders.

If you get in touch we can arrange for a mortgage broker we work with to contact you directly.

Step 3. Save as much deposit as you can

If you have a history of bad credit, a surefire way of showing a lender that you’re committed to getting a mortgage is producing as high a deposit as you can.

Depending on the type and severity of your credit record, a lender may ask for a deposit as high as 40%. But, in general, anywhere between 20%-25% is a really good starting point.

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What impact can a bad credit record have on your chances of getting a mortgage?

Not only does your credit history affect whether you can get a mortgage in the first place, it can also have an impact on your interest rate, as lenders will often only be willing to offer special introductory rates or other attractive mortgages if you show good past borrowing behaviors.

Your personal finances are important and you can make sure they’re on track to secure your best-rate mortgage by understanding how different types of credit issues will impact your loan rate and terms.

Which types of bad credit will Scottish lenders overlook?

Mortgage lenders in Scotland tend to take the same stance on bad credit as lenders in England, viewing each issue with the same severity and offering a similar range of options to mortgage providers south of the border.

There are lenders in Scotland for the following issues…

Bullet Tick Missed Payments
Bullet Tick Debt Management Plans or IVAs
Bullet Tick County Court Judgements
Bullet Tick Bankruptcy
Bullet Tick And more...

Even though there is little difference in the way these issues are viewed by Scottish mortgage lenders, finding the right broker is still essential. Ideally, you’ll want to use a broker who specialises in the Scottish market and has deep working relationships with providers who lend in the bad credit market there.

Will your location in Scotland make any difference?

You might find it more difficult to get approved if the property you’re buying is in the highlands or away from the mainland, but a mortgage broker could still find options for you in these areas. In the more populated areas of Scotland, things aren’t much different than they are in England.

Whether you’re based in St. Andrews, Perth, the Isle of Skye, Edinburgh, Inverness, Glasgow or Aberdeen, there are lenders out there who will consider you for a mortgage – even if your credit score isn’t perfect.

What are the differences with England?

While the basic tenets of how bad credit score impacts your mortgage loan applies across the English-Scottish border, there are some differences to securing a mortgage in Scotland. For instance, the Scottish government has its own set of mortgage loan support schemes to help first-time buyers get onto the property ladder.

These schemes include:

Bullet Tick Low-cost Initiative for First Time buyers (LIFT) shared equity scheme
Bullet Tick First Home Fund shared equity scheme
Bullet Tick Help to Buy (Scotland) shared equity scheme

And, as we’ve already touched on, there are some geographic restrictions on mortgages in Scotland, mostly in the highlands and away from the mainland.

Other differences to note between buying a house in Scotland, rather than England would be:

Bullet Tick Stamp Duty rates are slightly higher at the moment in Scotland (Stamp Duty was changed in 2012 and is now known as Land & Buildings Transaction tax (LBTT))
Bullet Tick Generally house prices in Scotland are lower than in England, which means the same amount saved for a deposit would count for more and give you a better chance of securing a mortgage

Speak to an advisor who specialises in Scottish mortgages

If you’re applying for a bad credit mortgage in Scotland, using a mortgage broker with in-depth knowledge of the local market and lender contacts there is essential.

By using our broker-matching service, you can be paired with an advisor we’ve handpicked because they have all of these credentials, as well as a strong track record helping customers just like you get a mortgage in Scotland.

Our service is free and an initial consultation carries no obligation to take things further. Call us on 0808 189 0463 or make an enquiry today to get started.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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