★ Adverse credit mortgage specialists ★ Bad credit & missed payment options ★ Complex case expertise ★ Whole-of-market advice
Adverse Credit Mortgages
Getting a mortgage with bad debt
Drummonds Finance Group
A problem on your credit file does not have to stop you getting a mortgage. Many lenders will consider missed payments, defaults, CCJs, debt management plans and IVAs, especially once some time has passed. We match you to the lenders whose criteria fit your history, for buyers and homeowners across the UK.
At Drummonds Finance Group, we compare adverse credit mortgage options from across the market to find lenders that are comfortable with your credit history, income, deposit and individual circumstances.
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What types of adverse credit can lenders consider?
Missed or late payments. One or two missed payments, especially more than a year ago, are often accepted by mainstream lenders. Recent or repeated missed payments, particularly on a mortgage or rent, narrow the choice.
Defaults. A default is recorded when an account goes seriously into arrears, and the lender closes it. Lenders look at how many defaults you have, how large they are, how long ago they were registered and whether they have been settled.
County Court Judgments (CCJs). Lenders treat a satisfied CCJ, one you have paid off, more favourably than an unsatisfied one. The date and amount matter more than the fact that one exists.
Debt management plans (DMPs). Some lenders will consider you while a DMP is running, usually after a period of on-time payments. More will consider you once it is complete.
Individual voluntary arrangements (IVAs). Most lenders want an IVA completed, often for a year or more. A smaller number will consider a current IVA with the supervisor's agreement.
Bankruptcy. Lenders usually want you to have been discharged for a minimum period, often several years. Bankruptcy stays on your credit file for six years from the date it started.
Payday loans. Many lenders are cautious about payday loans in the last 12 months, even if you repaid them on time, because they suggest pressure on your budget.
Mortgage arrears or repossession. These are the hardest to place, but a small number of specialist lenders will consider them, usually after a longer period of clean credit.
Why Choose Drummonds for Adverse Credit?
✅Whole-of-Market Access
We compare mortgage options from across the market, including specialist lenders that may be more flexible with adverse credit.
✅Specialists in adverse credit mortgages
Experience helping clients with defaults, CCJs, missed payments, arrears and other credit issues.
✅We look beyond your credit score
We consider your full circumstances, including your income, deposit, credit history and how recent any issues were.
✅Access to specialist lenders
Some lenders specialise in helping people with adverse credit and may consider cases that high-street banks decline.
Specialist Mortgages
Not every mortgage fits a lender's computer model. Much of our work at Drummonds Finance Group is with clients who have been turned down elsewhere or told their case is too complicated. We work with clients across the UK by phone and video, and we know which lenders will look at each situation properly.
What is an adverse credit mortgage?
An adverse credit mortgage is a mortgage for someone whose credit file shows past problems. It is not a separate product. It is a standard residential, remortgage or buy-to-let mortgage from a lender willing to look at your history in more detail.
High street lenders mostly use automated credit scoring, so one default or missed payment can mean a decline. Specialist lenders review applications individually and look at what happened, when it happened and how you have managed your money since.
How long after bad credit can you get a mortgage?
Timing is the biggest single factor. Most defaults, CCJs and missed payments stay on your credit file for six years, but lenders care most about the last one to three years.
As a rough guide, problems in the last 12 months narrow your options to specialist lenders. Between one and three years ago, more lenders will consider you, often with a larger deposit. After three years with clean credit since, many cases can be placed with mainstream lenders.
Our guide on how long after a default or CCJ you can get a mortgage explains the timings in more detail.
How much deposit do you need with adverse credit?
It depends on how serious and how recent the problems are. With minor, older issues, some lenders will lend with a 5% or 10% deposit. With more recent or more serious adverse credit, expect to need 15% to 25%, and sometimes more.
A bigger deposit lowers the lender's risk and usually opens up more lenders and better rates. A gifted deposit from family is accepted by most adverse credit lenders, as long as it is properly documented.
Will you pay a higher rate with bad credit?
Often, but not always. With minor or older adverse credit you may get the same rates as anyone else. With more recent or serious problems, specialist lenders usually charge more to reflect the extra risk.
Many people take a shorter fixed rate, such as two years, while their credit file improves, then remortgage to a better rate once the problems are older. We plan for that from the start.
Why does using a broker help with adverse credit?
Each lender has its own rules on what it accepts, how recent it can be and how much it will lend. Those rules are rarely published in full, and applying to the wrong lender can mean a decline and another search on your credit file.
We start by reviewing your credit report, then approach only the lenders whose criteria fit your history. Where it helps, we explain the background to the lender before the application goes in, such as a period of illness, redundancy or a relationship breakdown.
How to improve your chances of a mortgage with bad credit
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Check all three credit reports. Lenders use Experian, Equifax and TransUnion, and they do not always show the same information. Correct any errors before applying.
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Register to vote at your address. Being on the electoral register helps lenders confirm who you are.
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Keep up with every payment from now on. Recent clean history counts for more than old problems.
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Settle defaults and CCJs if you can. A satisfied debt looks better than an outstanding one.
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Avoid new credit applications and payday loans. Each application leaves a search, and short-term loans can put lenders off.
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Save a bigger deposit. It opens up more lenders and better rates.
Adverse credit mortgages for different situations
First-time buyers. Bad credit does not rule out a first purchase. Our first-time buyer bad credit mortgages page covers this in detail.
Remortgaging. If your credit has worsened since you took your mortgage, a product transfer with your current lender usually involves no credit check, so it can be the simplest way to avoid the variable rate. If you need to borrow more or want a better rate, a specialist remortgage may be possible.
Self-employed borrowers. Adverse credit combined with self-employed income needs careful lender selection, because both affect which lenders will consider you.
Family support. If affordability is the issue, a joint borrower sole proprietor mortgage can let a family member's income help without them owning part of the home.
Landlords. Some buy-to-let lenders accept adverse credit, usually with a larger deposit.
How the adverse credit mortgage process works
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We talk through your situation and review your credit reports together.
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We identify the lenders that accept your type and timing of adverse credit.
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We get a mortgage in principle, using a soft search where the lender allows it.
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We package your application with the right explanation and documents, and submit it.
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We manage the case with the lender, valuer and solicitor through to completion, and plan when you can move to a better rate.
Frequently asked questions
Author
Written by Liam Drummond CII (MP), owner and named mortgage broker at Drummonds Finance Group. Member of the Personal Finance Society, the Society of Mortgage Professionals and the Chartered Insurance Institute.
On this page we have explained what an adverse credit mortgage is and the types of credit problems lenders will consider, from missed payments and defaults to CCJs, DMPs, IVAs and bankruptcy. We have covered how long you may need to wait, the deposit you are likely to need, how rates compare, how to improve your chances, the options for different situations, and how we arrange your mortgage from start to finish.