How Do Bad Credit Mortgage Brokers Make a Difference?

Are you hoping to get a mortgage in the UK, but your credit score has taken a few hits?

It’s a common issue, and fortunately, there’s a solution: bad credit mortgage brokers. These experts specialise in assisting people with not-so-great credit scores.

They’re financial allies who:

Firstly, tackle the issue of bias.

Some lenders might see your credit score and worry about risk, which could lead to your mortgage application being rejected. But a broker knows how to talk to lenders and present your case in the best possible light.

Secondly, they cut through the jargon.

Mortgages can be tricky, with loads of specialist terms and mountains of paperwork. But a broker lives and breathes this stuff – they can explain everything clearly and handle the admin, making the whole process much less daunting for you.

This guide is designed to give you all the essential information on bad-credit mortgage brokers. Whether you want to deep-dive into the subject or quickly hop to a specific section, feel free to navigate it as you wish. 

What is a Bad Credit Mortgage Broker?

A bad credit mortgage broker essentially operates as a standard mortgage advisor but stands out due to their knack for supporting clients with poor credit scores.

What services do they bring to the table? Let’s lay them out:

• Special Offers. These brokers can line up unique deals crafted for borrowers dealing with less-than-ideal credit.
• Custom Advice. Offering guidance tailored to your specific credit situation, they help in mending and enhancing your credit score.
• Access to Lenders. Their network includes specialist lenders who are ready and willing to accommodate individuals with credit challenges.

Considering that past credit issues are common amongst mortgage applicants, it’s not surprising to find a plethora of brokers specialising in this field. 

They focus their attention on assisting this particular group. As bad credit mortgages can get more complicated than ordinary ones, the expertise of a specialised advisor can be hugely beneficial.

How to Choose a Suitable Bad Credit Mortgage Broker?

Finding the right broker for your unique circumstances is crucial. But how do you go about it? Let’s take a closer look.

Start with opting for brokers who specialise in bad credit mortgages. They’re equipped to handle the nuances associated with poor credit and understand how to present your case to potential lenders effectively.

Do your research. Look for brokers with a solid track record and positive client reviews. Don’t shy away from asking questions about their experience, success rate, and knowledge of poor credit mortgages.

But, if you want to make your journey a little easier.

Reach out to us. Our goal? To connect you with the best mortgage advisors for bad credit. Our service is completely free, quick, and easy.

We’ll evaluate your credit and personal circumstances, and then link you with a top broker well-versed in securing mortgages for clients with similar credit challenges.

Understanding Typical Credit Challenges

Now, let’s move on to the common credit challenges your chosen broker can help you overcome:

• Low Credit Scores
• No Credit History
• Late Payments
• County Court Judgements (CCJs)
• Individual Voluntary Arrangements (IVAs) and Debt Management Plans (DMPs)
• Repossession and Bankruptcy
• Defaults or missed payments

Remember, your credit challenges don’t define you, and they don’t have to dictate your homeownership journey. The right broker may help you navigate these issues, moving you closer to securing a mortgage.

How Much Does a Bad Credit Mortgage Broker Cost?

Just like any professional service, using a mortgage broker specialising in poor credit comes with its cost. But rest assured, the benefits and potential savings you could make often outweigh the charges.

In general, a poor credit mortgage broker might charge fees ranging from 1% to 3% of the mortgage amount. While this might sound a bit steep at first, consider it an investment. 

These brokers may provide access to exclusive deals and rates, potentially saving you thousands of pounds over the term of your mortgage.

But remember, costs can vary. Your circumstances, the complexity of your credit issues, and the amount you’re borrowing can all influence the fee. 

It’s always a good idea to discuss the costs upfront with your broker. 

Fee-Free vs Fee-Charging Mortgage Brokers

When it comes to securing a mortgage, you have two choices: fee-free and fee-charging brokers. What does that mean for you? Let’s break it down.

Fee-free mortgage brokers are those who don’t charge you an upfront fee. Instead, they earn their money through a commission from the lender. 

The initial advice they offer is free, but it’s worth noting that some may charge for additional services or if they find you a mortgage. 

If you’re dealing with bad credit mortgages, finding a fee-free broker may be more challenging, as these cases can be more complex. 

On the other hand, fee-charging brokers will charge you directly for their services and may also receive a commission from the lender, similar to fee-free brokers. 

A common thread between both types is that their financial incentives might be tied to the mortgage deal, so understanding the compensation structure is essential.

Transparency is key in both scenarios. Your broker, whether fee-free or fee-charging, should explain their fees in detail before you proceed. It’s wise to request a full breakdown of any fees in writing to ensure you understand all potential charges.

This approach keeps the process straightforward and helps you make an informed decision that aligns with your financial goals.

How a Broker Helps You with Remortgaging on Bad Credit

If your financial circumstances or credit history have shifted since you first secured your mortgage, you may be thinking about remortgaging. 

It can be a smart move, particularly if you want to secure a better rate or release equity from your home. 

But, having bad credit can complicate the process. And that’s where a specialist mortgage broker can step in.

A bad credit mortgage broker may help with remortgage under any poor credit conditions. Here’s how:

• They can help you explore options for debt consolidation or refinancing to pay off debt.
• Introduce you to appropriate lenders when taking out a second charge mortgage.
• They can also explain the ins and outs of this type of mortgage.
• You get access to lenders who offer Buy-to-Let Options, if you’re interested to invest in rental properties.
• They can ensure that you’re getting the most competitive remortgage rates for your situation.
• They can help you find a lender who’s ready to give a  loan-to-value (LTV) ratio that works for you.

Even with expert help, there’s no guarantee you’ll find a remortgage deal. Factors like your financial situation, the lender’s requirements, and your credit history can all influence your options.

While a broker can improve your chances, the outcome will depend on what’s available and realistic for your circumstances.

>> More about Remortgaging with Bad Credit

The Bottom Line

Armed with this information, you’re better equipped to make informed decisions about your mortgage needs, even if your credit history is less than perfect. 

Remember, a specialist bad credit mortgage broker is a valuable partner who can guide you through this often complex landscape.

Got more questions or ready to start exploring your mortgage options? Don’t hesitate to get in touch with us. Get matched with a specialist mortgage broker today.