Can I Get a Mortgage with Bad Credit but a Large Deposit?

With a bad credit score, securing a mortgage might feel just out-of-reach. But while credit issues can make a mortgage application more complex, getting a mortgage with bad credit is still achievable.

The good news is that there are plenty of different ways that will boost your chances of securing a mortgage deal – especially if you have a large deposit.

In this article, we explore which types of credit issues lenders will consider, what specialist lenders accept applicants with bad credit, and outline how a large deposit could help you secure the mortgage that matches your needs. Let’s begin.

How Does a Big Deposit Improve My Mortgage Chances with Bad Credit?

It’s all about the lender’s risk. A larger deposit reduces the amount you need to borrow, which in turn lowers the total loan-to-value (LTV) ratio. This ultimately makes you a less risky borrower to lenders, even if you have a bad credit history.

One of the most common questions we get asked here at Boon Brokers is: How big of a deposit do I need for a mortgage?

When your credit isn’t perfect, one way of improving the chances of securing a mortgage with competitive rates is to increase your deposit. The exact amount required will wholly depend on your specific circumstances, borrowing amount, and property that you plan to purchase.

That said, lenders are more likely to approve applications with a stronger deposit as it ensures an extra layer of protection to their investment. Ultimately, the more you can save and the bigger your deposit, the better chances of accessing the very best mortgage products.

As a whole-of-market, fee-free mortgage broker, Boon Brokers has access to a wide panel of specialist lenders and high-street banks that consider applicants with adverse credit. Whether you’ve had missed payments, defaults, or CCJs, our dedicated mortgage advisers can help you compare the latest mortgage deals – finding you the lender that is best suited to your needs.

What Type of Bad Credit Do Mortgage Lenders Consider?

Upon receiving a mortgage application, lenders will assess your financial profile in a variety of different ways. This will include an in-depth assessment of your credit profile.

It is important to note that lenders will not just look at your credit score, but will also look at the history behind it.

The most common credit issues that lenders find include:

• Missed or late payments
• County Court Judgments (CCJs)
• Bankruptcies or Individual Voluntary Arrangements (IVAs)
• Defaults and debt management plans

Even small improvements to your credit score can help open the door to a wider selection of lenders who are willing to consider your application – even if your score remains less than perfect.

If you’re concerned about securing a mortgage with bad credit and CCJ on record, or your options of getting a mortgage after bankruptcy, there are lenders who will accept applications from borrowers in these situations.

At Boon Brokers, our fee-free expert advisers specialise in helping clients with complex cases. With whole-of-market access, we have access to a wide-range of lenders and know which are more flexible to accommodate those with unique financial circumstances.

Which Specialist Mortgage Lenders Accept Applicants with Bad Credit?

While high-street lenders typically have strict lending criteria, specialist lenders will often cater to borrowers with more unique financial situations. As a result, specialist lenders will generally offer more tailored mortgage products for borrowers with bad credit histories or financial circumstances that mainstream banks might decline.

At Boon Brokers, we work with a wide range of specialist lenders who are experienced in assessing mortgage applications from clients with adverse credit histories. Below we have provided a list of some of the most reputable specialist mortgage lenders known for supporting applicants with bad credit:

As a whole-of-market mortgage broker, Boon Brokers works with all these lenders and many more. Check out the full list of specialist and high-street lenders we work with here: The Lenders We Work With.

How Much Deposit Do I Need to Secure a Mortgage with Bad Credit?

While the exact deposit amount will depend on your financial profile and your chosen lender, the size of your deposit will significantly impact your mortgage options when you have credit issues.

In short: if you’re hoping to secure a mortgage with bad credit, then most lenders will expect a higher deposit than usual to offset their risk.

As a general rule, if you have adverse credit, a deposit of at least 15 – 20% is typically recommended. However, the larger your deposit, the stronger your application.

Increasing your deposit amount to 25%, 30% or even 40% will significantly lower your loan-to-value (LTV) ratio, making you a more attractive borrower to lenders – boosting your chances of approval and granting access to more competitive interest rates.

At Boon Brokers, we offer fee-free, expert advice to help you understand your options and find a mortgage deal that matches your specific needs. Whether you have questions about bad credit or are trying to find out the deposit amount you need, our expert advisers are here to support you every step of the way in your mortgage journey.

Will I Pay Higher Interest Rates on a Mortgage with Bad Credit?

As a general rule, yes. Mortgage offers for people with bad credit will usually come with higher interest rates to offset the risk for lenders. Essentially, lenders price loans based on risk, and so applicants with a poor credit score will likely face increased borrowing costs.

However, as outlined in this article, a larger deposit can help lower the mortgage rates that you may be offered. This is simply because a higher deposit offsets that risk for lenders and makes you a more favourable borrower.

Searching for a mortgage with a bad credit history can be tricky, and it’s important to shop around and consider all costs, not just the interest rate, to find the most affordable deal. Working with a specialist lender may also provide you with more competitive rates that are tailored to your financial situation.

How Do I Check and Improve My Credit Report Before Applying for a Mortgage?

Improving your credit report before applying for a mortgage can help boost your chances of success.

Each lender will use their own credit agency. However, the most common credit agencies used in the UK include Experian, Equifax, and TransUnion.

You can sign up to each or any of these agencies to complete a soft credit check to view your current credit score.

To start strengthening your credit score, consider a proactive approach with the following steps:

• Register on the electoral roll at your current address
• Check your credit report regularly for errors or outdated information
• Make payments on time, especially for credit cards, loans, and utilities
• Keep your credit utilisation low – ideally under 30% of your total limit
• Avoid multiple credit applications in a short space of time
• Don’t close old credit accounts unless necessary, as longer credit history helps

For a complete guide on how to improve your credit score and prepare your report for mortgage applications, read our latest article on How to Improve Your Credit Score.

Should I Use a Mortgage Broker to Find a Specialist Lender for Bad Credit?

If you have bad credit, getting a mortgage can be far more complex than a standard application. Unfortunately, many high-street banks have strict lending criteria and may automatically reject applications based on certain credit issues, such as CCJs, defaults, or missed payments.

Even if you’re eligible, it can be increasingly difficult to know which lender is most likely to offer the most competitive rates.

This is where a trusted mortgage broker can make a real difference.

At Boon Brokers, we specialise in helping clients with bad credit secure mortgages that are tailored to fit their financial needs. Our experienced mortgage advisers understand all the challenges associated with bad credit, and can liaise with specialist and high-street lenders alike on your behalf.

As a fee-free whole-of-market mortgage broker, we provide impartial advice that can help guide you through the application process to maximise your chances of approval.

Contact Boon Brokers today for expert support and to find the best mortgage deal suited to your financial profile and credit history.