Bad Credit Buy-to-Let Mortgages

Getting a Buy-to-Let Mortgage with Bad Credit

Buy-to-Let mortgages for applicants with bad credit are becoming more common. Lenders may adjust interest rates and deposit amounts based on credit history. Speak to one of our specialist mortgage brokers for guidance.

In the past, getting a mortgage for a Buy-to-Let property was difficult for those with bad credit. However, there are now specialist lenders willing to offer mortgages. These lenders are understanding of past financial problems and willing to help find a solution.

Understanding credit issues and checking your credit report helps find the right lender and product for you. You can get your credit report from Experian, Equifax, or TransUnion, the three main credit agencies in the UK.

After you get your report, speak to our specialists who can review it to find a lender and product that fits your needs.

When applying for a Buy-to-Let mortgage, having a larger deposit will result in better interest rates. Bad credit and Buy-to-Let mortgages are both specialist areas, so having both may limit your options.

The size of your deposit will impact the number of lenders willing to consider your application. Some may look at your entire property portfolio when making lending decisions. The amount of deposit needed depends on factors like property value, rental income, and financial situation.

If you have bad credit, you can still remortgage a Buy-to-Let property. Some lenders are willing to consider applicants with a poor credit history.

If you have an existing rental property, you may be looking to remortgage for a variety of reasons.

Having bad credit may limit your options for remortgaging, but there are still lenders willing to consider your situation. Specialist brokers can review your credit report and property investment goals to find suitable lenders and products.

You may have to pay an early repayment charge to your existing lender if you remortgage.

When you apply for a Buy-to-Let mortgage, lenders run a credit check. If you have recent bad credit, it may make it harder to get a good interest rate. Some lenders may approve Buy-to-Let mortgages for those with a bad credit history, but at a higher interest rate.

However, once your credit improves, you can renegotiate for a better rate or consider remortgaging. Keep in mind that your credit history has the potential to get better with time. Much depends on your individual circumstances and the deal we can find to suit your immediate and long-term needs.

If you have bad credit, contact us to learn more about your mortgage options. Our team can help you explore what’s available on the market. Our specialist advisers are ready to assist you.

When applying for a Buy-to-Let mortgage with bad credit, seek out specialist lenders. High street lenders have narrow criteria and are likely to decline applications, impacting credit further. Having many late payments in the past year makes it harder to get a loan and may require a specialised lender.

You risk periods of vacancy and the possibility that rental income won’t cover the mortgage.

Failure to keep up with repayments on your mortgage could result in the repossession of your property.

Lenders prioritise missed payments on secure loans or mortgages over unsecured loans or credit agreements. Applicants with missed mortgage payments face increased scrutiny.

Lenders typically give until the end of the month to rectify missed payments before reporting to credit agencies. Banks can rectify banking errors within this timeframe.

The lenders will consider how many late/missed payments you have on your credit file and how long ago they occurred. One or two isolated late payments several years ago should mean that you will have access to more lenders and lower rates.

Having many late payments in the past year makes it harder to get a loan from specialised lenders. Lenders consider the kind of account you missed a payment on when deciding mortgage approval. Missed payments on unsecured accounts are less of an issue than missed payments on secured credit.

Missing multiple payments on a credit agreement triggers a default notice. Lenders consider the number, timing, and amounts of defaults when making decisions.

You can still get a Buy-to-Let mortgage with defaults, but your personal situation will be important in the decision. Receiving a default notice may prompt action to resolve the situation. To understand your options, contact a specialist team for advice.

A County Court Judgement (CCJ) is a legal decision stating you are responsible for a debt. You can prevent it from being recorded by paying immediately. If not, it will impact your credit history for up to six years.

Obtaining a mortgage may be challenging if you have a CCJ. However, some lenders may still offer you a Buy-to-Let mortgage if they review your financial situation.

A Debt Management Plan (DMP) helps manage debts by freezing them, but can impact credit scores and make it difficult to get a mortgage. Applying for a Buy-to-Let property with a DMP may require a higher deposit and specialised lenders. Lenders may be willing to lend if you show a clean credit record post-DMP.

An IVA is a legal agreement to repay debts at a manageable rate, overseen by an insolvency practitioner. A cleared default may limit your access to finance for up to six years. After settling an IVA you can still apply for a mortgage, but may have fewer lender options and tighter terms.

Traditional banks might reject your request based on your credit rating. However, other lenders will consider your entire financial situation. They will assess whether you’re able to afford the loan. Working with an experienced professional is crucial for developing a practical payment schedule.

If you’re unsure or have questions, feel free to reach out to our team for advice. We offer a free initial meeting with no obligation to continue.

Having a bankruptcy in the past can make it more difficult to obtain a Buy-to-Let mortgage. However, it doesn’t always prevent you from being approved for one. You can apply for a mortgage after bankruptcy, but the requirements will be stricter. Waiting a few years and getting your finances in order can help you qualify for a mortgage with better terms.

After bankruptcy, your credit will improve after six years, but you still need to disclose it when applying for credit. You may need a special lender for a mortgage. Work with a mortgage broker to find the best option for your situation.

Failure to make mortgage payments on time can affect approval for future mortgages. Lenders view you as a risky borrower.

Factors like outstanding debt, previous lender, and time since repossession influence their decision. Niche-market lenders may be more flexible. Providing a larger deposit can help. If it’s been three years or more since repossession, many lenders may consider your application.

Contact our team for a free consultation to assess your chances for Buy-to-Let after repossession. We have access to unique mortgage deals from specialist lenders to help find the right mortgage product for you.

You might think that you face a brick wall when applying for a mortgage with bad credit, and that a mortgage on a Buy-to-Let property will be out of your reach. The truth is that, while it might be more difficult, depending on the nature of the bad credit items on your file, it could still be possible to get a mortgage with a bad credit record.

The way to get a Buy-to-Let mortgage with bad credit is firstly to be honest and face facts, and secondly to take the required action to put yourself in the best possible position. A bad credit event will have a negative impact on a mortgage application, if only very slightly, and your behaviour since it happened will be a major influence on a lender’s approach to your case.

If it was a minor event, like a missed payment or two on credit cards, store cards or phone bills, which you took steps to pay off and you have had a clean bill of health since, then most lenders will be willing to discard them. However, if you had a more serious issue – perhaps a CCJ, bankruptcy or even a repossession – then the more you have done to remedy the situation, put yourself in a stable financial position and repair your credit score the better.

Time is also a factor – the longer ago these events occurred and the more time you have had since then to keep a clean credit history, then the less weight they will carry.

The majority of mainstream lenders will not consider your mortgage application, even if you only have a slight blemish, so it’s likely that you’ll have to consider offers from specialist lenders who base their decisions to lend on more than a simple credit record check or computer algorithm. To access these lenders, you will need to enlist the help of an expert mortgage broker or adviser, who will be able to spell out your options moving forward.

A Buy-to-Let property is as much a business proposition as it is a property to own and a home for a tenant to live in. A lender’s decision will depend as much on the anticipated rental income from the property (in order to service the repayments on the mortgage) as your own personal income and financial situation. So, if you have bad credit marks on your credit history then, while it might make the process a little more tricky, it is certainly not the end of the world.

As you can imagine, a lot will depend on the type of bad credit event, the amount of money involved, and the amount of time that has passed since it occurred. However, in every circumstance, with a bad credit event on your file your options for lenders and products will be more limited than otherwise, and the attitude of lenders towards your application will be tainted in some way.

Almost certainly, in every case of someone applying for a mortgage with one form of bad credit or another, they will benefit greatly, and their chances of acceptance will be much enhanced, if they talk over their situation and application with an expert mortgage advisor who has access to a wide range of mortgage products and experience in handling cases exactly such as yours.

Here at IMC Mortgage Brokers, our team have been working with people with all kinds of bad credit issues for many years – we completely understand the problems you face and know what it takes to turn a seemingly impossible situation into a successful result. With access to all kinds of deals from specialist lenders that you won’t find on the high street, often with exclusive rates, we are confident we will be able to find the mortgage product to meet your needs. Get in touch with us today.

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