When people are struggling with a bad credit score they automatically think that this excludes them from taking out a mortgage. We are here to tell you that this isn’t necessarily the truth.
A bad credit score can make some people feel as though they haven’t got a hope in hell of securing their first mortgage. They write themselves off before they know the facts, so we thought we would spread some good news about bad credit.
Yes, your credit score matters but it isn’t the only thing that lenders look at. It would be amazing if everyone scored in the higher scale of the scoring but that isn’t reality. We want anyone that is thinking of getting a mortgage to be aware of some facts before they discount themselves completely from owning their first home.
Bad credit doesn’t mean you can’t get a mortgage.
To put it simply, potential lenders use your credit score to show how you have managed your debts previously. Lenders use it to help them decide whether you are eligible for a mortgage. With that being said, most lenders will factor this in with many other factors around your circumstances.
Cutting back spending isn’t necessarily the answer to rectify bad credit.
When it comes to your credit score, if you haven’t been great at debt management in the past then the damage is already done. Cutting back on spending won’t necessarily have a huge impact on the lenders decision of offering you a mortgage. Bad credit sticks but there are lenders out there that will consider your current circumstances.
Having a mortgage broker to help can make a huge difference.
Mortgage brokers know the market and they will know who to use without you exhausting all avenues by yourself. Mortgages can be a stressful process anyway but adding bad credit can make things a little more rocky.
Here at Mortgage Squared we like to think of it this way, if you can imagine a long corridor with fifty doors either side and the doors represent mortgage lenders.
The bigger the deposit the more doors are open,. When it comes to bad credit this can close some of the doors. However the older the issues the more doors that will stay open. If you are managing the debt better than you did then even more doors stay open.
You get the gist! The more you are rectifying your debts the better the chances of lenders offering you a mortgage. If you have continued bad credit and it is evident on your credit score, bank statements and current debts, then doors will close and stay closed.
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