Self-Employed Bad Credit Mortgage

What role does a credit score play in getting a mortgage as a self-employed borrower with bad credit?

First of all, there’s no such thing as a credit score. We don’t walk around with a number above our heads for lenders to decide whether they’d lend to us or not. If we did, every single lender would lend us the same amount of money, and that is simply not the case.

Every single lender has their own benchmark – a minimum score that you would need to be accepted by them. It’s different for every single lender, so if you have been refused by one that doesn’t mean that every single lender is going to close their doors to you. It just means that we may need to go to another lender, whose assessment of your circumstances is slightly different.

The cleaner the credit report, and the higher the indicative score on that report, the more likely those lenders are to accept your application. Bear in mind, some lenders underwrite your applications manually and do not use credit scores at all.

If your score with credit reference agencies is poor or quite low, there are solutions out there, providing the rest of your case has its merits, where an underwriter will look at it without relying on a computer saying yes or no.

Do any, or many, mortgage lenders specialise in lending to self-employed individuals with bad credit?

There are certainly lenders that classify themselves as non-adverse lenders, but who can look at these cases if the rest of the client’s application is fine.

Some lenders in the subprime market cater to clients who have had blips in the past and can focus on helping them get onto the property ladder. Assuming everything is fine, we can then move you to the high street when the renewal comes through.

I speak as one of many brokers here at The Mortgage Quarter who know lenders are really good with the self-employed and have a bit of flexibility. Not all lenders credit-score, and they are able to manually underwrite applications with that human touch.

With access to a diverse range of lenders and tools, we can efficiently assess your eligibility and secure the most suitable terms for your needs.

What steps can self-employed individuals with bad credit take if they have been declined for a mortgage?

We would get an up-to-date and accurate copy of your credit report. Should there be any inaccuracies or information that does not exist, we can rectify this to accurately reflect your financial profile.

It can be very daunting to discuss your previous financial information. It is very personal. Sometimes people feel apprehensive and ashamed if they fall into that negative cycle of trying to escape debt. But, as experienced advisers here, we’ve heard it all before. It’s what we deal with day to day – and it is very likely that we would have helped someone in a worse position than you are now.

If we can’t help someone, we will give them constructive guidance and a plan on what they need to work on. It could be a ‘yes’ in X amount of time in the future, and we can try again. This gives you direction on what to do next if now is not the right time for you.

How long does it take for self-employed individuals with bad credit to get a mortgage offer?

Sometimes this can take a little bit longer, depending on the type of bad credit and if the lender or underwriters have more questions.

Working with a mortgage broker that understands the underwriters’ questions, lender policies, and the likely information required, the process to receive an offer can be quick. This is because all of the necessary information would be gathered upfront, satisfying the underwriter’s requirements.

If we are aware of your circumstances, and we’re able to package your application fully and in the most suitable light, we’re able to present your case to the underwriter and explain why your application should be considered.

Delays in mortgage applications often occur when all the necessary information is not provided upfront. This can prolong the process, turning an anticipated two-to-three-week mortgage offer into a month-long wait. Providing all of the correct information initially will significantly increase the likelihood of a quicker approval.

As soon as you’ve got the mortgage offer from a lender, you’re in the same position as anybody else with regards to getting your mortgage over the line. Ultimately, it’s that preparation at the beginning to ensure you get there as quickly as you can.

Have you got any final thoughts?

If you are self-employed with bad credit and you’re wondering what the next steps are, get yourself online, go to a comparison site and have a look at reviews. Get as much advice as you feel is necessary.

As soon as you feel comfortable with someone, you’ve got the paperwork in order, and you feel confident in their ability, I’m sure they can help you achieve your mortgage goals.

Key Takeaways:

• Having all paperwork in order and up-to-date, and a larger deposit, significantly improves your chances of a mortgage approval as a self-employed individual with bad credit.
• Engaging with an adviser with access to a wide range of lenders can streamline the application process and help secure suitable terms.
• There isn’t a universal credit score; each lender has its own internal benchmark. A refusal from one lender doesn’t mean all doors are closed. Some lenders even underwrite applications manually, not relying on credit scores at all.
• Delays in mortgage applications often occur when all necessary information is not provided upfront – so provide all of the correct information initially.
• If declined for a mortgage, it’s crucial to get an up-to-date credit report and rectify any inaccuracies. Seeking advice from experienced advisers can provide constructive guidance and a plan for future applications.
  
  

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.