The best way to mortgage with bad credit?
People with bad credit often ask what is the best way to get a mortgage when they have credit problems. This article will hopefully go some way to answering that question and hopefully give some useful insight for the best way to go about getting a mortgage.
The first thing to consider when wanting a mortgage is who you should speak to for advice - there are plenty of options available but some are better than others.
Speak to your bank to get a mortgage
You could approach your bank to get a mortgage and they will probably be more than happy to see you, after all your an existing client and they should want your business.
Unfortunately if you have bad credit registered against you, obtaining a mortgage through a high street bank or building society may not be an option for you. The mortgage a bank and building society offer don't normally cater for adverse credit and you may find your own bank refusing to offer you a mortgage and turning you away. This can leave people feeling embarrassed and possibly a little disheartened if they can not get a mortgage with their own bank.
Speak to a mortgage broker to get a mortgage
A mortgage broker should be more able to get a mortgage approved than going direct to a high street lender. The main reason for this is that a bank or building society may have 5 to10 mortgage deals available (which more than likely wont allow adverse credit) - a mortgage broker will or should have access to every lender meaning they have access to literally thousands of mortgage products.
Although this sounds great if the broker doesn't deal in adverse or bad credit mortgages you may even find they are unable to help - this may not be because there isn't a mortgage available but may simply mean the broker doesn't have the specialist knowledge required to get the best deals available for people with bad credit.
Getting a mortgage through a specialist broker
Obtaining a mortgage through a specialist mortgage broker will usually get better results - we have seen plenty of potential clients who have been told they can not obtain a mortgage by a mortgage broker only to be offered a deal after speaking to a specialist broker.
A specialist broker, whilst the chances are they will be more able to understand what obstacles need to be overcome in order to get a mortgage offer issued will normally charge a higher fee than a standard broker reflecting both their time spent on mortgage cases with bad credit and the additional knowledge they may be able to bring to the table.
So which is best for getting a mortgage with bad credit
The answer to this is dependent on your individual set of circumstances.
The chances are you will need to speak to a broker as its unlikely a high street bank or building society will agree to a mortgage if bad credit is registered against you.
After speaking to a number of brokers you should come across one that you can relate to and one you feel will have your best interests at heart - whether you opt to use a normal 'high street' broker or a specialist broker may also depend on your financial situation. If you are unable to pay the slightly higher broker fees of a specialist broker you may want to opt for a high street broker and hope they are familiar enough with the sub prime mortgage market to be able to help.
If possible it may be worth opting for a broker who charges a fee on completion or a broker who is flexible enough to work to your budget, if the broker charges a fee on completion and the mortgage does not complete you don't pay them anything which is better for you although broker fees on completion tend to be higher than if the broker were to charge an up front fee due in part to the fact that they are taking a risk with the application and may not get paid at all, even if they do everything right and have worked hard on your application.
