Credit Scores Part 2: Getting a Mortgage with a Low Credit Score

What’s my credit score like?

Understandably, banks and building societies are careful who they lend money to, and financial histories are always looked into, with no exceptions.

Looking into a credit history will show up any defaulted payments and give the lender a good impression of how financially responsible you are with your spending. As well as looking at your credit report, lenders will also look at any County Court Judgements (CCJs) or bankruptcy proceedings that may be against your name.

If any of these apply to you, then you may find it harder to be accepted for a mortgage, however, there are certain lenders who will still lend to you.

What’s my credit score like?

It’s always best to see your own credit score; this way you can better understand if and why there might be a reason for a refusal of your mortgage application.

You can request to see your own credit rating from companies like Experian, Equifax and Call Credit. Remember, there are some really simple ways you can help improve your credit score by being a little more vigilant, such as registering on the electoral roll.

Mortgages with low credit ratings

If you do have a poor credit score, it’s more likely that the interest rate on your mortgage could be higher, in order to compensate the risk that the lender is taking.

In this case, it may help if you have a larger deposit to put down upfront in order to potentially reduce your monthly repayments.

Other options available

If you’re struggling to get a deposit together, there are other options that could be available to you.

Help to Buy Shared Ownership If you can find as little as 5% of the purchase share upfront for a deposit. Then you can buy a share of the property (between 25% and 75% of the market value). You pay monthly rent on the remaining portion and can increase your ownership share as and when you can afford to do so.
The Bank of Mum and Dad If you have a family member who owns a home and is willing to help you out, they can be named on your mortgage as a guarantor, and either:

Their home is used as security – your mortgage company would reclaim money from your guarantor, or repossess their home if you failed to meet the repayments on your mortgage.

Or use their savings as security – your guarantor will put a lump sum into a savings account with the lender. This money will be unattainable until you have paid off a certain amount of money on your mortgage.

How can we help you?

At Century Capital we specialise in providing the best possible service for arranging fast, non-equity based short term bridging loans.  These loans are individually tailored to each client’s specific needs.

We would be delighted to discuss how we can assist you.  Please get in touch with our Mayfair office on 0207 495 9191 or email us at enquiries@century-capital.mywebpresence.website

A member of our experienced team will be back in touch with you very shortly.


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