Adverse Credit Mortgages

A difficult past doesn't have to mean a difficult future.

Having adverse credit doesn't mean you can't get a mortgage. It means you need the right lender and the right adviser who knows which lenders to approach and how to present your case.

Most high street lenders will decline applications with adverse credit automatically. But there is a whole market of specialist lenders who assess applications individually, look at the full picture and make decisions based on where you are now, not just where you've been.

I work with adverse credit cases regularly and know which lenders are likely to look favourably at your application depending on the nature, severity and age of the credit issues involved.

What counts as adverse credit?

Adverse credit covers a wide range of situations:

  • Missed or late payments on credit cards, loans or utilities

  • Defaults where a lender has formally recorded a missed payment

  • County Court Judgements (CCJs) a court order requiring you to repay a debt

  • Debt Management Plans a formal arrangement to repay debts at a reduced rate

  • Individual Voluntary Arrangements (IVAs) a formal insolvency arrangement

  • Bankruptcy the most serious form of insolvency

Each of these is treated differently by lenders. The amount involved, how long ago it occurred and whether it has been satisfied all make a significant difference to what is available to you.

Sub prime lending

For more serious or recent credit issues including unsatisfied CCJs, recent bankruptcy or IVAs, or a combination of multiple adverse entries, mainstream adverse credit lenders may not be suitable. In these cases I work with sub prime specialist lenders who are specifically set up to assess complex credit histories on their individual merits.

Sub prime lending typically involves higher rates and larger deposit requirements but it can be a genuine route to home ownership for people who have been told no elsewhere.

How lenders assess adverse credit

Every lender has their own criteria. Some will accept defaults over three years old. Some will consider satisfied CCJs regardless of age. Some will lend to applicants who have been discharged from bankruptcy for as little as one year. Others require three or six years to have passed.

The key is knowing which lenders sit where before you apply. A declined application leaves a footprint on your credit file and can make subsequent applications harder. Getting this right first time matters.

Who I work with

  • Applicants with missed payments or defaults

  • Applicants with CCJs, satisfied or unsatisfied

  • Applicants who have completed a Debt Management Plan

  • Applicants with a satisfied IVA

  • Applicants discharged from bankruptcy

  • Applicants with a combination of adverse credit entries

  • Applicants who have been declined elsewhere

FAQs

Can I get a mortgage with a CCJ?
Yes in many cases. Lenders look at the amount of the CCJ, how long ago it was registered and whether it has been satisfied. A small satisfied CCJ from several years ago is treated very differently to a recent unsatisfied one. Get in touch and I'll give you an honest assessment of what's likely to be available.

How long does adverse credit stay on my file?
Most adverse credit entries remain on your credit file for six years from the date they were registered. After six years they drop off automatically regardless of whether they were satisfied or not. The age of the adverse entry is one of the most important factors in what lenders will consider.

Do I need a bigger deposit with adverse credit?
Generally yes. Most adverse credit lenders require a minimum deposit of 15% to 25% depending on the severity of the credit issues. The more serious the adverse credit the larger the deposit typically required. Sub prime lenders may require more. I'll be clear with you about what is realistic before we start.

Will I pay a higher interest rate?
Yes, adverse credit mortgages carry higher rates than standard residential mortgages. The rate reflects the lender's assessment of risk. As your credit profile improves over time and adverse entries age or drop off, remortgaging onto a more competitive product becomes possible. I'll always keep the longer term picture in mind.

What if I've been declined by my bank?
A decline from a high street lender doesn't mean a mortgage isn't possible. It means that lender's criteria don't fit your circumstances. Specialist and adverse credit lenders assess applications differently. Get in touch before applying anywhere else as further declined applications will impact your credit file.

Can I remortgage with adverse credit?
Yes. If you already own a property and have adverse credit on your file, remortgaging is still possible in many cases. The options available depend on your current loan to value, the nature of the adverse credit and how long ago it occurred. I'll give you an honest picture of what's achievable.

What is the difference between adverse credit and sub prime?
Adverse credit is a broad term covering any negative entry on a credit file. Sub prime refers specifically to more serious or recent credit issues where mainstream lenders including specialist adverse credit lenders are unlikely to consider the application. Sub prime lenders sit in a distinct category and assess the very hardest cases. I treat them as a separate category and know which lenders operate in that space.

Will a Debt Management Plan stop me getting a mortgage?
Not necessarily, but it does significantly limit your options while it is active. Most lenders want to see a DMP satisfied and some time having passed before they will consider an application. Some specialist lenders will consider applicants with an active DMP in specific circumstances. Get in touch and I'll give you an honest assessment.

Can I get a mortgage with an active IVA?
It is very rare but not impossible. A small number of specialist and sub prime lenders will consider applications where an IVA is still active, typically subject to the IVA supervisor's written consent, a significant deposit and a strong case for affordability. It is one of the hardest situations to place but worth a conversation before assuming the answer is no. I'll give you an honest assessment of what, if anything, is available.

I was made bankrupt. Can I get a mortgage?
Yes, once you have been discharged. Discharge typically happens one year after the bankruptcy order. Some specialist lenders will consider applications from recently discharged applicants, though rates and deposit requirements will reflect the risk. As time passes and the bankruptcy ages more options become available.

How do I improve my chances of getting a mortgage with adverse credit?
Time is the biggest factor. Adverse entries become less significant as they age. Keeping up with all current credit commitments is essential. Building a deposit reduces the lender's risk. Registering on the electoral roll helps. And getting the right advice before applying anywhere is critical. A declined application makes things harder, not easier.

The information on this page is intended as a general guide only and was accurate at the time of writing. Lender criteria for adverse credit cases can change significantly and frequently. Please get in touch for current and personalised advice.

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