Updated: December 08, 2021

Bad Credit Mortgage Brokers

Struggling to get a mortgage because of adverse credit? Find out how bad credit mortgage brokers can help you in our in-depth guide.

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No impact on your credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 08, 2021

If you’re looking to get a mortgage, but have a poor credit score or have been turned down in the past, it may feel like a hopeless challenge. The good news is, it’s actually perfectly possible, and by using a broker experienced in arranging bad credit mortgages, your chances of success are much higher. 

In this article we’ll look at how seeking the right advice from the outset can help you access mortgage lenders with a more flexible approach to bad credit issues and provide guidance on how to better prepare your application.

Why use a bad credit broker?

Although most mortgage brokers have general knowledge across the entire market, certain areas, such as adverse credit borrowing, require a more in-depth level of expertise. Specialist bad credit brokers have extensive knowledge in that specific niche and an advanced understanding of the various criteria of each lender.

The term ‘poor credit’ has many meanings and can apply to those who simply have no credit history (have never borrowed money), right through to those who have experienced bankruptcy or repossession.

To further complicate issues, interpretations vary from lender to lender, so it’s important to find a broker who understands how lenders apply their criteria to each applicant, depending on the type and level of bad credit they have.

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What to look for in a bad credit broker

To ensure you’re getting the best help available, it’s important to choose a broker with the following qualities:

  • Relevant experience – If you’ve had a home repossessed in the past, it’s important that your broker has prior experience of helping people in these precise circumstances
  • Objectivity – In order to be truly objective, a broker must not be tied to a particular lender or panel of lenders. An independent whole-of-market broker has access to every lender and will keep your best interests at heart when they recommend one.
  • Qualifications – Always ensure your broker is either directly regulated by the Financial Conduct Authority (FCA) or an appointed representative of a company who, in turn, is regulated by the FCA.
  • Success-only fee structure – It can take time for a broker to find you the right lender, so ensure you’re aware of any fees involved before they begin working for you. Many of the brokers we work with offer a free initial consultation and only charge fees if they secure you a mortgage. Typical fees range from 1-3% of the mortgage they’re arranging for you so be aware of those charging more than this!

We work with brokers who are highly experienced in this area of finance and have helped people with all types of adverse credit to finance their home purchases. Our free broker matching service will pair you with an expert who is best placed to help you, whatever your circumstances.

If you get in touch we can arrange for an advisor to contact you straight away.

How a broker will help you

There’s a number of ways using a broker, rather than approaching lenders directly, can be beneficial, such as:

Finding a suitable lender

Although many high street lenders refuse mortgages purely based on a borrower’s credit score, specialist lenders tend to be more open-minded, assessing how severe the credit issue is, as well as when, and why it occurred. If your score has declined following a significant life event, such as the death of a partner, or divorce, they may be willing to work around this, providing you meet their other criteria.

Some lenders won’t even use your credit scoring in the decision-making process, looking more at your whole financial picture. A specialist broker knows exactly which lenders would consider your precise circumstances and has access to every bad credit lender on the market, so they have the best chance of securing you a mortgage.

Identifying the most competitive deals

Lenders typically charge higher interest rates when you have credit issues, to mitigate some of the risk involved in lending to you. Specialist brokers will ensure that you achieve the most competitive rates for your circumstances, some of which may not be available to the general public.

Considering all other options

Depending on your circumstances, and the severity of your credit issues, traditional home finance options like mortgages may not be available to you at the current time, even via specialist lenders. If that’s the case, an experienced bad credit broker will look at potential alternative finance options that may be available to you.

On the other hand, if they feel that it would be more beneficial for you to wait and apply for a mortgage further down the line, they’ll advise you on how long you should wait, and how you can improve your chances of achieving a mortgage in the future.

How to prepare for your initial broker meeting

There are a few steps you can take, prior to meeting with a broker that will help them to gain a better picture of your situation. This is what we recommend you do:

  • Check your credit file beforehand so you know what you’re up against.

They’ll need to do a soft search (which does not show on your credit file) to see which lenders may be able to help you, so ensure you’re completely honest with them. You can download your credit reports here. 

  • Have an explanation as to why your debts exist.

Those who can fully explain the reason behind their debt will often find it easier to secure a mortgage than those who were irresponsible with their spending. Taking steps to repay your debt will also reflect upon you favourably.

  • Avoid multiple applications.

This is especially important if you’ve already been refused a mortgage. Your best next step is to approach a broker, as multiple (rejected) applications in short succession can be further detrimental to your credit score and could hinder any success further down the track.

  • Save as much deposit as possible

Some lenders require larger deposits if you have bad credit, so having a sizable deposit (15%-20%) ready will give you more options, as well as access to the most competitive interest rates.

  • Get your papers in order

The more information you provide, the more likely a broker will be able to help you. Anything that proves your income or supports your explanation for the adverse credit, or shows responsible money management will be helpful. Our mortgage application guide will be able to help you.

Get matched with an expert bad credit broker

There are so many different reasons for bad credit, and each lender has their own gauge for which ones are acceptable to them, and which are not. This can make it very difficult to know which lenders will consider your particular credit issues. Our 5-star-rated broker matching service will introduce you to an expert on bad credit with access to the whole market.

Contact us now on 0808 189 0463 or via this form and we’ll immediately begin our search for the broker that most closely matches your needs. All initial consultations are free, and you’re under absolutely no obligation.

FAQs

Can I remortgage if I have bad credit?

Yes, you can. Typically specialist lenders who are willing to offer first mortgages to people with bad credit will also offer remortgage options. The same assessment criteria will apply, such as the severity and age of the issues, as well as whether you’ve taken steps to rectify them. The brokers we work with will be able to advise on this, be sure to mention that you’re interested in a remortgage when you speak to our team.

Ask a quick question

We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in bad credit mortgages. Ask us a question and we'll get the best expert to help.

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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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