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Getting a mortgage - with a poor credit rating

Getting a mortgage if you have a poor credit rating

A poor credit rating can be a significant barrier to getting a mortgage. Even those with high salaries and able to put down a considerable deposit can struggle to get a mortgage. Yet, although having a poor credit rating is doesn't help in getting a mortgage, it doesn't mean getting one is impossible either.

Before beginning to see what steps you can take to get a mortgage whilst having poor credit, first check your credit rating is correct. For a fee, credit reference agencies like Experian and Equifax can check your credit file for you. It can check you're on the electoral roll, close credit accounts you're no longer using and make sure there are no other errors.

Show your lender that you're actively managing any debts you have. Such as paying off your present debts as much as you can and make sure you pay all bills, without exception, on time. Collect all your bank statements and pay slips so you can show them to any prospective lender. There are a number lenders on the market who specialise in providing mortgages to people who have poor credit ratings.

There are certain lenders on the market, usually referred to as adverse credit lenders or sub-prime lenders, who specialise in providing mortgages to people who have poor credit ratings. However, you should be prepared to pay a higher rate of interest.

If you have a poor credit rating, it may mean you're simply asked to put down a larger deposit for a mortgage. Possibly 25% or more of the property's purchase price. As with everyone else, those with poor credit need to shop around for the best deal. A mortgage broker could also help you with this

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