Joint Mortgage Bad Credit
Joint Mortgage Bad Credit
Chris Kenny explains how a joint mortgage works if you have bad credit.
Can we get a joint mortgage if both or one applicant has bad credit?
Yes. Lenders will always go off of the worst credit profile of the two applicants. If one person has good credit and the other person doesn’t, it will probably influence which lenders will consider you and what terms you can get. But yes, you can get a joint mortgage if one or both applicants have bad credit.
What types of bad credit affect a joint mortgage application?
It can be anything detrimental to your credit file. That could be county court judgements (CCJs), defaults or missed payments. If you’re in a debt management plan, or you’ve had any bankruptcies, individual voluntary agreements (IVAs) or repossessions, those can all have an influence on a mortgage application – joint or otherwise.
Are there specific lenders who deal with joint mortgages with bad credit?
Yes, there are plenty of lenders who will happily consider a mortgage application from someone with bad credit. In fact, with those lenders that’s their target market. They specifically cater for people who have bad credit. Whether it’s joint or sole, there will be lenders who consider it.
Does being married make a difference when applying for a joint mortgage with bad credit?
More often than not, yes. Whilst there are exceptions to the rule, with the majority of bad credit mortgage lenders they require both applicants to go on the mortgage if they are married.
That’s standard policy with most lenders. There’s no subjectivity – it’s a hard and fast policy rule. A handful will consider a sole application from a married applicant, but the most will want both people to go on the mortgage.
Can I still get a joint mortgage if I’ve had previous bankruptcy or foreclosure?
Yes, there are lenders out there who will do mortgages after a foreclosure or a repossession, whichever terminology the lender chooses. Bankruptcy, foreclosures, repossessions…there are many lenders who will consider them.
They normally require there to be at least a certain number of years since the event happened, but there are lenders who will consider it.
What if I’ve been declined for a mortgage with bad credit previously?
If you’ve been declined for a mortgage just for bad credit, that’s no reason to believe that you can’t get a mortgage. With bad credit mortgage lenders, you either do or don’t meet their published criteria. It’s not based solely on credit score.
You may have been declined for a mortgage with bad credit for a specific reason with one lender, but what one lender has an issue with could be fine with another lender. If you’ve been declined for a mortgage for having bad credit, there are likely to be other lenders out there who will consider you.
What if I’m a First Time Buyer and have bad credit? Will this affect me getting a joint mortgage?
Not necessarily. It doesn’t really restrict the options. Bad credit mortgage lenders just like to be comfortable that lightning’s not going to strike twice. What caused the bad credit? Was it a one-off situation?
For a First Time Buyer, if you’re not renting you’re probably not going to have much evidence that you can manage financial commitments like debts, loans, phone bills. If you have been renting, you can evidence your rent history and that you’ve been paying your bills and your council tax etc., which makes it a bit easier.
If you still live at home, it’s very helpful to evidence that you can manage finance, by budgeting for your monthly outgoings and putting money in savings every month. But that’s a general underwriting philosophy. It doesn’t really impact whether or not a bad credit mortgage lender will consider you.
It’s just helpful from an underwriting perspective to have a track record of paying bills, rent or just evidence that you can manage your money well.
Do we need a larger deposit for a joint mortgage with bad credit?
Yes. A handful of bad credit mortgage lenders operate in the 5% and 10% deposit space, but they’re few and far between. The circumstances have to be exactly right to fit with them.
Realistically, you should aim for at least 15% and above. At 15% deposit, the floodgates open and a lot more lenders will consider you. It’s not impossible to get a bad credit mortgage with a 5% or 10% deposit, but the options are thin on the ground.
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What is the minimum credit score required for a joint mortgage with bad credit?
The good news is there is no minimum credit score required for a joint mortgage with bad credit. Lenders who will consider this predominantly operate on published criteria.
That means they will allow X defaults within X number of years, for example. As long as you meet that lender’s published criteria, you could have a score of zero and they’d still consider you.
Can we use a guarantor for a joint mortgage if we have bad credit?
You can, yes. Many lenders will consider that. The bigger concern is if the guarantor has bad credit, because that understandably can make lenders uncomfortable. But if you’ve got bad credit, then yes, there are lenders who will consider a guarantor mortgage for you.
How long do I have to wait after improving my credit score before applying for a joint mortgage?
There’s no straightforward answer to that. Everyone’s circumstances are so different, and so is the range of things lenders will consider.
To give you an example, I have a case active at the moment where someone’s had three county court judgments within the last six months – and the lender is considering it.
They’ve obviously not got a good credit score, but lenders are happily looking at it. It’s all based on your own individual circumstances, what credit issues you’ve had, how long ago they were, whether they’re satisfied and how much they were for.
Don’t wait to find out what your options are. The best thing is speak to a broker like ourselves as soon as possible – because once we’ve assessed your own circumstances we can tell you whether there are options.
It might be that there are no options right now, but based on your circumstances there will be in three, six, nine or 12 months. It always helps to find out where you stand.
What else do we need to know about joint mortgages with bad credit?
We’re professionals, and this is what we do on a day-to-day basis. With most bad credit mortgage lenders for joint and sole mortgages, you’ve probably never even heard of them because they don’t deal with the public. They’re exclusively through mortgage brokers.
As much as people suggest doing your own research, this is our bread and butter and it’s what we do on a daily basis. We know all the lenders and their criteria – so we don’t need to spend days or weeks trying to figure out who will do what.
Once we’ve had a 20 minute phone call with you and sight of your credit file, we’ll be able to confirm who can consider you and what your options are within a matter of minutes. You’re paying for our knowledge, skills and experience at the end of the day. That’s how mortgage brokers can help in this situation.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
