Adverse Credit Mortgage Guide (UK)

Struggling to get a mortgage because of bad credit? You’re not alone - and you’re not out of options. With the right advice and lender, it’s still possible to get approved. Here’s how the adverse credit mortgage process works.

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What Is Adverse Credit?

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"Adverse credit" refers to a poor credit history that can make lenders cautious. It may include:

• Missed or late payments
• County Court Judgements (CCJs)
• Defaults
• Bankruptcy
• Individual Voluntary Arrangements (IVAs)
• Debt Management Plans (DMPs)
• Repossession

While these can limit your mortgage options, some lenders specialise in helping people with credit blips or more serious financial issues.

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Can You Get a Mortgage with Bad Credit?

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Yes, but it depends on:

• How severe the credit issues are
• How recent they occurred
• Whether they’ve been resolved
• Your current income and outgoings
• Your deposit size

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Specialist lenders (not usually found on the high street) are more flexible when assessing risk.

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Step-by-Step: The Adverse Credit Mortgage Process

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1. Check Your Credit Report

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Start by downloading your credit file from all three agencies:

• Experian
• Equifax
• TransUnion

Check for:

• Accuracy of your details
• Date and status of defaults or CCJs
• Any active repayment arrangements
• Financial links to others (joint accounts, ex-partners, etc.)

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2. Speak to a Specialist Mortgage Broker

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A broker with experience in adverse credit can:

• Assess your situation honestly
• Recommend the right lenders for your credit profile
• Help explain your circumstances to underwriters
• Save time by avoiding automatic declines

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3. Gather Key Documents

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You’ll need:

• Proof of ID and address
• Proof of income (payslips, tax returns, bank statements)
• Details of any outstanding debts or repayment plans
• Credit reports from the agencies above

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4. Get a Decision in Principle (DIP)

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This gives you an indication of how much you may be able to borrow — without a full credit application. A DIP helps you:

• Understand your budget
• Strengthen your position when house-hunting
• Spot any issues early before a full application

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5. Find a Property and Make an Offer

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With a DIP in place and an idea of your maximum borrowing, you can begin your property search and submit offers with confidence.

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6. Submit Your Full Application

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When ready, your broker will help you complete your full mortgage application, submitting:

• Your documents
• Your credit explanation (e.g., "life event" or one-off issue)
• Supporting evidence (if required)

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7. Lender Valuation and Underwriting

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The lender will:

• Conduct a valuation on the property
• Fully assess your credit profile, income, and affordability
• Make a final decision

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This part can take longer with adverse credit, so patience is key.

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8. Receive Your Mortgage Offer

If successful, the lender will issue a formal mortgage offer. Your solicitor will then complete the legal process - and you’re on your way to getting the keys.

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Tips to Improve Your Chances

• Save a larger deposit - 15%–30% may be needed with adverse credit
• Keep up-to-date with current payments‍
• Avoid applying for multiple forms of credit before your mortgage
• Clear smaller debts if you can
• Be honest and transparent - lenders don’t like surprises

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What Lenders Look For

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• ‍Severity of issues - Defaults vs. bankruptcy‍
• Recency - The older the issue, the better (most focus on the last 6 years)‍
• Resolution - Are the debts settled? Paid in full?
• ‍Affordability - Can you clearly afford the repayments now?‍
• Stability - Income, employment, and address history all help

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Types of Bad Credit Mortgages

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• Fixed or variable rates (may be higher than mainstream rates)
• Specialist or subprime lenders
• Manual underwriting (real people assess your case — not computers)
• Guarantor or family-assisted options in some cases

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Risks to Be Aware Of

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• Interest rates may be higher
• You may need to pay arrangement fees
• Fewer lenders = less choice
• Your home is still at risk if you fall behind on payments

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Need Help with an Adverse Credit Mortgage?

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We specialise in helping people with less-than-perfect credit get the mortgage they need. Whether you’ve had past problems or just need honest advice, we’re here to guide you through every step - clearly and without judgement.

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Your home may be repossessed if you do not keep up repayments on your mortgage.