Bad Credit Mortgage Myths
There are many myths surrounding the mortgage market, especially when it comes to bad credit mortgages and dealing with a poor credit history. Many people do not understand exactly how bad credit mortgages work and some believe that they aren’t even eligible for a mortgage if they have a bad credit history. We’ve listed a few bad credit mortgage myths to identify the facts.
Bad credit mortgages are only for those who have low incomes
There is a common misconception, usually among first time buyers, that if they have a relatively low income they should apply for a bad credit mortgage. False!
Bad credit mortgages are for those who have a bad credit history and their affordability checks will be much more in depth as the lender needs to establish the borrower’s capability to repay the loan. They want to ensure you can actually afford the mortgage you are applying for so you may need to have an income that’s slightly higher than the national average.
A bad credit mortgage will damage my credit record
Although anytime you apply for a loan it will show up on your credit record, the details of the loan request will not show up on your credit record. This means that future lenders won’t know that you applied for a bad credit record as they have no way of knowing who queried your credit files.
However, the more lenders that query your credit report, the more your credit file will be damaged. Points will be added onto your credit file each time a potential lender accesses your credit record, automatically reducing your eligibility for a mortgage.
Previous tenants at my home address will affect my credit score
This is not true – lenders do not carry out credit searches on addresses, only individuals. Lenders are only able to search for information on an individual and anyone they may be financially linked with.
My family will be affected by my bad credit
False. Your family or housemates will not be affected by your bad credit rating unless your share joint finances such as a bank account, mortgage or other type of loan.
I can clear any adverse information off my record by paying a fee
False again. Information can only be altered or removed from your credit record if it’s identified as incorrect. You cannot pay to wipe off any adverse information.
Applying for a bad credit mortgage
If you have a bad credit history and you’re interested in applying for a bad credit mortgage then allow the experts at Mosaic Mortgages to arrange a mortgage most suitable to your specific circumstances. As specialists in assisting those with a bad credit history, we can provide totally independent bad credit mortgage advice and source the best mortgage out of the whole of the bad credit mortgage market.