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Securing a mortgage with bad credit is surrounded by misconceptions that often lead to confusion and discouragement among potential borrowers.

Whilst it's true that having a low credit score can pose challenges, it doesn't necessarily mean that obtaining a mortgage is impossible. It's important to address these misconceptions to provide a clearer understanding of the situation.

The Myths

Firstly, one common misconception is that bad credit automatically disqualifies you from getting a mortgage. While a low credit score can limit your options and potentially lead to higher interest rates, there are specialised lenders like us that are here to assist individuals with less-than-perfect credit histories.

Secondly, many believe that a high income can compensate for bad credit. While a higher income can be beneficial and can influence lender decisions, your credit score still plays a significant role in the approval process. Lenders assess your ability to manage debt responsibly, which is reflected in your credit history.

Another misconception is that a larger down payment can offset bad credit. While a substantial down payment can improve your chances of approval and may result in more favourable terms, it might not fully counteract the effects of bad credit. Lenders consider a combination of factors when evaluating a mortgage application.

All mortgage lenders assess affordability differently. As well as looking at your income, a lender will usually look at your regular household bills and outgoings to ensure that you can afford the monthly mortgage repayments. A borrower’s credit rating and ability to pay back the loan are also taken into consideration during the affordability process.

Time for change

The past few years have been particularly challenging, and many individuals have suffered financially as a result of the coronavirus pandemic and the cost of living crisis. As a result, this may have caused people to miss one or more monthly payments such as utilities bills, which will have a direct impact on their credit score.

There are various reasons why people miss monthly payments, but this doesn’t mean these borrowers shouldn’t be considered. Having a one off credit fault can be particularly frustrating for some individuals, as it may mean that they no longer meet the criteria of traditional lenders that can’t see past their situation.

That’s why at Central Trust, we consider all credit profiles to try and help find solutions for all clients. As a specialist lender, we can help clients with adverse credit histories that include CCJ’s, defaults or missed payments. Whatever your credit circumstances, we’ll do our best to help you get the loan you need.

Need advice?

We have 35 years' experience in the mortgage industry, so we understand the challenges that clients face currently. That’s why we specialise in secured lending for those who have a poor credit score that may have previously been turned down.

If you are considering taking out a second charge mortgage and would like to discuss your options with a qualified advisor, call us on the number at the top of this page, or submit an enquiry form and we’ll call you back.