If you suffer from bad credit, finding a mortgage can be daunting. There are certain mortgage lenders, however, who offer specific mortgage packages for people with bad credit. So the answer to the question “why use a mortgage broker?” rapidly becomes obvious, as it allows you to find the best deal from a lender that fits with your lending criteria.
What causes bad credit?
Bad credit can come about as a result of a number of things – late fees accruing on bills, unpaid loans and bills, county court judgements against you, rent arrears, overdue car payments; these are just a few. It’s also worth considering that you can also get bad credit if you share your finances with a partner who has bad credit – once you elect to make your finances “joint”, their bad credit becomes yours, too.
Can you still get a mortgage?
Bad credit is surprisingly common, and it doesn’t always come about as a result of poor/negligent financial decisions – sometimes you simply get a run of bad luck, and before you know it you have a black mark in your financial history. But don’t worry, there are still may be a mortgage for you.
Whether you caused your bad credit or not, however, you’re still going to be considered a higher risk loan to the mortgage company than someone with a clean financial history. So, though you can still get a mortgage there are going to be certain conditions attached to it. This can range from anything to a larger deposit being required, higher interest rate payments, and higher fees.
Every mortgage company is different. Some don’t offer mortgages to people with bad credit, otherwise known “sub-prime” mortgages at all. Others do, but with some conditions attached to them. The key is to be as open and honest about your financial situation as possible, if you want your application to be accepted.
A Mortgage Broker will match your criteria to a lenders criteria before submitting an application so that you don’t negatively impact your credit file more.