Saved a Deposit for a Mortgage But Have Found Out You Have Bad Credit?
Found Out You Have Bad Credit ? and Need a Mortgage Loan !
This is a common scenario for many people, saving hard for a mortgage deposit only to realise that past borrowing mistakes have caused a bad status rating meaning that they are declined for a mortgage. In many cases, the debt has been paid off, but the borrower has suffered a CCJ, which will remain on a credit file for 6 years minimum and hinder borrowing opportunities.
It is worth noting that in this situation when looking for a mortgage deal it is wise to seek advice from an independent lending advisor. They are often extremely knowledgeable about lenders that are willing to consider mortgage applications from those with a bad credit rating. Although these deals may be more expensive in the long run, they can help you to get on the property ladder and stop paying dead money on rent. During this time you can work on improving your credit rating, with a view to remortgaging your property after a certain amount of time to get a better deal on your mortgage.
Another Option would be to keep on Saving until your Bad Credit Rating Improves.
If you keep paying your debts, with time your credit rating will naturally improve, and at this stage you’re likely to have a greater deposit, which will also assist in helping to get the best mortgage deal available to you. The downside of this option is that you run the risk of paying rising rents while you are waiting, and the possibility of rising house prices.
In Short the Best Method is to Access your Credit File
Then find out what has caused your bad credit rating. You can do this by registering with the main credit reference agencies, utilising checkmyfile.com, noodle.com or equifax.co.uk. Once you have determined the cause of your credit rating, you can then seek advice and assistance from an independent mortgage advisor to find out which lenders specialise in mortgages for those with bad credit, and if applicable apply with this lender to secure the best mortgage deal available to you.
It is of crucial importance that if approved for a home loan with or without bad credit
that you ensure that you keep up with repayments, failure to do so will worsen your credit rating, and at worse mean that you will lose possession of your home. If you begin to struggle with your mortgage repayments, contact your mortgage provider and seek debt help and advice straight away. You mortgage is a priority debt and payments should be made ahead of other debt repayments such as unsecured loans or credit cards debts that you may be repaying in addition to your mortgage.