A blemish on your credit report doesn't need to lock you out of homeownership in the long term, with banks offering a range of deals for people who've had County Court Judgments (CCJs), individual voluntary arrangements (IVAs) and even bankruptcies.
Time is a great healer, and the longer you've spent remedying your credit issues, the better the chance you'll have of getting a good deal.
Here, we take a look at the mortgage options for people with adverse credit, and provide advice on the steps you can take to improve your credit file.
2019 has been a positive year for borrowers with a less-than-perfect credit history.
It's hard to quantify the total number of bad credit mortgages on the market for a couple of reasons.
First of all, adverse credit comes in all shapes and sizes, making it difficult to draw a comparison between some deals.
And secondly, some lenders don't offer mortgages specifically targeted at people with a history of credit problems, but may offer such people their regular deals on a case-by-case basis.
So while the overall number is likely to be higher, the chart below shows how many deals are listed by comparison site Moneyfacts as being available to people with adverse credit.
As you can see, the overall number of deals has steadily increased over the past few months, before dropping off a little ahead of Christmas:
There are currently 1,483 deals that accept people who've had a CCJ, but rates vary massively.
To get the best ones, you'll need to have been discharged from the CCJ for at least three years, as shown in the table below.
Cheapest rates for people with CCJs
|LTV (loan-to-value ratio - the proportion of the property price you want to borrow)||CCJs||Deal type||Lender||Initial rate||Revert rate||Fee|
|65%||None in past three years||Two-year fixed-rate||Yorkshire BS||1.27%||4.25%||£1,995|
|75%||None in past three years||Two-year fixed-rate||Yorkshire BS||1.29%||4.25%||£1,995|
|85%||None in past three years||Two-year fixed-rate||Accord||1.65%||4.25%||£995|
Of the 340 deals available to people who've had an IVA, the vast majority of the best rates require you to have been discharged for four years, though it is possible to get a deal three years after the IVA has been satisfied.
Cheapest rates for people with IVAs
|LTV||IVAs||Deal type||Lender||Initial rate||Revert rate||Fee|
|60%||Satisfied for four years||Two-year fixed-rate||Skipton BS||1.29%||3.99% (rising to 4.99%)||£995|
|75%||Satisfied for four years||Two-year fixed-rate||Skipton BS||1.58%||3.99% (rising to 4.99%)||£995|
|85%||Satisfied for four years||Two-year fixed-rate||Accord||1.65%||4.25%||£995|
Being declared bankrupt is a serious form of adverse credit, so to get a mortgage after bankruptcy you'll need to have been discharged for a number of years.
There are 563 deals available to people who've previously been declared bankrupt. You'll need to have been discharged for at least three years to get a mortgage at all, but some of the best rates require as long as six years to have passed.
Cheapest rates for people declared bankrupt
|LTV||Bankruptcy||Deal type||Lender||Initial rate||Revert rate||Fee|
|65%||Discharged for six years||Two-year fixed-rate||Yorkshire BS||1.27%||4.25%||£1,995|
|75%||Discharged for six years||Two-year fixed-rate||Yorkshire BS||1.29%||4.25%||£1,995|
|85%||Discharged for six years||Two-year fixed-rate||Accord||1.65%||4.25%||£995|
A broker with specialist knowledge of bad credit mortgages will be able to rule out lenders who definitely won't accept your application and find you the right deal for your specific circumstances.
Brokers have a big advantage when it comes to these specialist deals, as the majority of products simply aren't available to borrowers who apply directly.
The table below shows the percentage of bad credit mortgages available exclusively from mortgage brokers.
|Direct only||Direct or through a broker||Broker only|