Securing a mortgage has always been difficult for people with bad credit. However, having bad credit doesn’t necessarily mean the end of the road when it comes to buying property. By working with a mortgage broker, like Red Tick Home Loans, we’ll analyse your credit situation against the various lending policies, and find the best possible solution to fit your needs.
Find your credit rating
Before you start applying for finance, check your credit report. Your credit report shows how many times you’ve applied for credit, any defaults you’ve had, any debts that are unpaid, judgements over debts, and details of any bankruptcy.
While this report won’t determine whether or not you’ll be able to secure a home loan, it’s a good indication of any potential issues that may limit your choice of lenders.
Dealing with bad credit
Many banks and non-bank lenders will turn you down if you have bad credit. But there are still a number of lenders with slightly different criteria that will consider lending to someone with bad credit.
While borrowers with bad credit may require a larger deposit and will likely be charged a higher interest rate, in many cases, once you’ve shown you can make payments on time for a certain period, there may be an option to refinance at a lower interest rate.
You’ll need to show a steady income and your lender will require you to disclose any other debts you have. It’s a good idea to pay off any outstanding debt you have before you apply for new finance or consider consolidating them into your current mortgage.
Compare interest rate
Whether you have a poor credit history or not, it’s vital you compare as many finance options as possible to ensure you’re getting the best deal. Your mortgage broker will be able to go through the available options with you to help you make an informed choice. Remember to factor in extra fees and charges as these can have a significant impact on the overall cost of the mortgage too.
If you’ve made a few mistakes along the way, Red Tick Home Loans can help you. Even with bad credit, there are still a number of finance options available to you. And while you may have to pay a little extra now because of your bad credit, provided you make payments on time you won’t be stuck on higher interest rates forever.
With our expertise and knowledge of the market, we’ll find a finance option to fit your needs. Get in touch with Red Tick Home Loans today to find out more about securing a mortgage with bad credit.