Applying for a mortgage can be an unknown experience when it comes to being a first-time buyer or someone with a poor credit score, and navigating various application factors can come with its ups and downs.
Applying for a mortgage with a poor credit score is not impossible, and there are plenty of lenders that are open to accepting your application with a couple of variables in mind.
Read on to find out how you can get a mortgage with a bad credit score…
Bad credit refers to your credit score being rated poor or very low, with credit companies such as Experian offering an accurate score reading.
When applying for a mortgage, lenders look toward your credit score as a way of assessing your money management.
Bad credit could be caused by – missed payments such as utility bills and loans, taking out too many loans at the same time, using schemes such as ‘payday’ loans and applying for credit multiple times during a short period (credit cards included).
It’s simple – bad credit can show poor money management, which in turn may show lenders that you are less likely to pay back your mortgage than someone with a good credit rating.
You would be sceptical to lend someone money that has a history of not paying it back.
With that being said, there are plenty of lenders and banks that still accept those with a bad credit rating, so don’t be disheartened.
Also, just because one business or lender doesn’t accept your application doesn’t mean that another wouldn’t too, as there can be multiple varied factors that accept one’s decision and some lenders may operate on a different basis than others.
As previously mentioned, business’ may have different criterias when it comes to lending money, with some thinking a score of 600 is ‘poor’, while others rating it ‘fair’, so it’s important that you research different lenders and their criteria.
Many lenders also offer mortgages specifically made for those that have poor credit, however, you can also expect higher fees and monthly payments.
With that being said, if you’d rather wait for your credit score to improve in order to avoid excess fees and high monthly payments, it’s a great idea to research ways of improving your credit score and build a better rating, then reapplying a minimum of 6 months after, as multiple applications in a short amount of time can also cause credit damage.
Applying for a mortgage with a poor credit score can be more difficult than normal, with extra fees and only specific lenders offering mortgages.
So, it’s important that you seek help from a professional to guarantee you a brilliant deal and one that works for you.
Email us at email@example.com, we’re here to help.