Home buyers struggling to get on the real estate ladder due to poor credit can now get free mortgage advice.
Online mortgage broker Habito has teamed up with bad credit advisor Impact Specialist Finance to provide over £ 500 worth of free help.
Bad credit can have a negative impact on your chances of getting a loan or a mortgage.
It can also cost home buyers hundreds of pounds to end up with expert advice on how to get their first home.
Habito says the new partnership will help those facing serious credit problems such as missed payments or court judgments (CCJs).
In particular, the chances that these will affect your rating are greater if they have occurred in the past six years.
How To Find A Mortgage When You Have Bad Credit
If you are struggling to get a home loan due to poor credit, here are some options.
If you have a low credit score, your options may be limited.
Some black spots affect your chances of getting a loan and can last up to six years – this can include late payments and County Court (CCJs) judgments.
But all is not lost if your credit isn’t good, and here we show you what help might be available to you.
Alternatively, you can apply to a specialized lender who is more likely to take on people with poor credit ratings.
It should be noted that these lenders charge higher than average interest rates and usually require a larger deposit.
You may need to pay a deposit of at least 20 percent to apply.
Typically, if you’d rather avoid this, you need to keep a clear record of no debts and missed payments for at least 12 months.
This must also go hand in hand with the settlement of all debts and the timeliness of all payments.
Those with poor credit can use a broker matching service such as Online Mortgage Advisor or Just Mortgage Brokers, or go directly to a specialized lender such as Accord, Aldermore or Metro Bank.
These Article by Which? shows a number of specialist lenders how much to save and who to accept.
Impact’s standard mortgage advice fee is £ 574 but has been waived for Habito customers.
As with any financial obligation, there are advantages and disadvantages to a mortgage.
It is important that you can afford the repayments and that you know exactly what you are signing up for.
Daniel Hegarty, Habito Founder and CEO, said, “We exist to free people from the mortgage hell, and we are constantly working to make the mortgage experience easier for more and more homeowners.
“Although we are currently unable to help people with serious credit problems, we want to be able to offer the best possible alternative.”
How to Increase Your Credit Score
If you have a bad credit history, you may find it harder to get a loan or a mortgage.
If so, there is something you can do to improve your rating.
Remember that a missed payment or a CCJ can stay on your record for up to six years. So keep an eye on your profile to make sure it is updated once you have paid off your debt.
- Register yourself on the electoral roll. This proves who you are and where you live, which means getting credit will be easier if you are on the list. You can sign up for free register for voting. Recent research shows that this can add up to 50 points to your score.
- Don’t make too many loan applications. Submitting a large number of applications in a short period of time can be considered a financial emergency – and each application will be noted in your file. Use a soft search eligibility calculator to show how likely you are to be accepted. This will not show up in your record, so it will not affect your score.
- Always pay your bills. Late payments are also recorded in your file. That means it’s important to keep track of your bills, including utility and credit cards. Delaying payments is a surefire signal to lenders that you may not be the best at paying on time.
- Pay off your debt. Having a lot of debt can reduce your chances of getting a loan or mortgage. It is a good idea to get out of debt and stay debt free for at least 12 months before even applying for a loan or credit card.
- Use a credit builder credit card. These cards tend to have high interest rates compared to regular cards, but if you can show that you are spending responsibly with them, it can improve your odds in the eyes of lenders.
Dale Jannels, Managing Director, Impact Specialist Finance, said, “Impact has worked diligently in this sector for many years and we are always keen to help our clients achieve their dreams and leave the problems of the past behind them.
“We see a lot of customers who, based on their credit history, felt that they were either unable to obtain a mortgage or reschedule from their current lender.”
Would you like to buy your first property? Here is everything you need to know What creditworthiness do you need to buy a home?.
Did you know in the meantime? Bad credit could get your insurance bill up £ 1,100 a year?