Why You Always Need to Take Extra Care If You Have Bad Credit
If you are looking for a mortgage but you have bad credit, choosing the right mortgage broker can be the difference between being able to finally own your own home and not. While a bad credit mortgage broker is there to do a lot of the heavy lifting for you, you still need to do your part and ask the right questions before you commit to anything.
Do You Have Experience Helping Clients with Bad Credit?
Before you do anything else, you should make sure that your broker specialises in helping borrowers with bad credit. Some are more suited to less complex cases, and will not have the expertise to provide you with the tailored support you need. There’s no sense in beating around the bush here: just ask them directly whether they’ve worked with clients in a similar position to yours.
A broker who is a good match for you will be able to show you how they have helped prospective buyers with bad credit and what kind of strategy they have.
Which Lenders Do You Work With?
It’s really important to know which lenders a broker has access to. Ideally, you will want to choose one who offers a whole of market service, which means they can access a wide pool of lenders. This will include those who deal specifically with bad credit mortgages. If you’re applying for a mortgage with poor credit, access to the widest possible range of lenders dramatically increases your chances of not just getting approved, but getting a better rate too.
Can You Tell Me About the Credit Checks I Can Expect?
When you apply for a mortgage with bad credit, it’s important to avoid unnecessary hard credit checks, as these can further damage your credit score. As a general rule of thumb, lenders tend to perform hard credit checks, but a soft credit check might be carried out during the initial stages, such as for a Decision in Principle. These do not impact your credit score.
So, ask your broker how many lenders they intend to approach and whether those checks will be soft or hard. A good broker will only present your application to lenders where you stand a solid chance of approval, reducing the number of potential credit checks.
What Fees Will I Need to Pay?
Always ask for a full breakdown of your broker’s fees, so that you have a good idea of what you will need to pay and when. Some brokers will waive their fees if they aren’t able to find you a mortgage, which for some clients can offer a greater degree of peace of mind. You should also ask about any fees related to the mortgage itself. Are there any early repayment charges or other costs that could affect you further down the line?
You’re All Set
Of course, we have only just scratched the surface. You might want to ask your broker about what you can do to improve your chances of success, what they will do if you are rejected, and what size deposit you will need. The most important thing is, you’re getting all the information you require ahead of time!
