Many people assume that having adverse credit means getting a mortgage is impossible. While adverse credit can make borrowing more challenging, it does not automatically mean you will be declined. In fact, there are specialist lenders who consider applications from people with a range of credit issues.
In this guide, we’ll explain what is classed as adverse credit, how it can affect a mortgage application and what options may be available.
What is Adverse Credit?
Adverse credit is a term used to describe previous financial difficulties that may appear on your credit report. This can include:
- Missed payments
- Defaults
- County Court Judgements (CCJs)
- Debt Management Plans (DMPs)
- Individual Voluntary Arrangements (IVAs)
- Bankruptcy
- Repossessions
Many people search “what is adverse credit UK” when starting their mortgage journey, and the answer can vary depending on the lender. Some lenders may view a single missed payment differently from a recent default or CCJ.
Can You Get an Adverse Credit Mortgage?
The simple answer is yes.
An adverse credit mortgage is designed for people who have experienced financial difficulties in the past. Specialist lenders understand that circumstances can change and often assess applications on a case-by-case basis.
Factors lenders may consider include:
- The type of adverse credit
- How long ago the issue occurred
- The value of the debt involved
- Your current income and affordability
- The size of your deposit
This means that even if you’ve been declined elsewhere, there may still be options available.
Does Credit Score Affect Mortgage Applications?
A common question is: “Does credit score affect mortgage UK applications?”
Whilst your credit score can be a useful indicator, lenders generally place more importance on the information contained within your credit report. They will look at your overall financial history, current commitments and affordability rather than relying solely on a score.
This is why some applicants with lower credit scores may still be approved, whilst others with higher scores may not meet a lender’s criteria.
How Much Deposit Do You Need?
One of the most common searches is “bad credit mortgage 10% deposit.”
Whilst some lenders may require larger deposits for applicants with adverse credit, this is not always the case. The amount required will depend on your circumstances, credit history and the lender’s criteria.
Generally, a larger deposit can provide access to a wider range of mortgage products and potentially more competitive interest rates.
Working with an Adverse Credit Mortgage Advisor
Our adverse credit mortgage advisers can help identify lenders that may be suitable for your circumstances.
Rather than applying to multiple lenders and risking further credit checks, our specialist advisers can assess your situation and recommend lenders that are more likely to consider your application.
This can save time and help improve your chances of finding a suitable solution.
What If You’ve Been Declined?
Being declined for a mortgage can be frustrating, but it doesn’t always mean there are no options available.
Different lenders have different criteria and an application that doesn’t fit one lender’s requirements may be suitable for another. This is especially true for applicants with adverse credit, self-employed income, contractor income or other complex circumstances.
Before giving up on your property goals, it may be worth seeking specialist advice.
How BDC Specialist Finance Can Help
At BDC Specialist Finance, we understand that every case is different. We regularly help clients with:
- Adverse credit mortgages
- CCJs and defaults
- Missed payments
- Debt Management Plans
- Self-employed income
- Complex income structures
As specialist mortgage brokers, we have access to the whole of market lenders and can help explore potential options based on your individual circumstances.
If you’ve been told no elsewhere, don’t assume your mortgage journey is over. Complex doesn’t mean impossible.
Get in touch with BDC Specialist Finance today to discuss your circumstances and explore what options may be available.
