Buying a space as a couple is an exciting task, and can be seen as the beginning of a new chapter in both of your lives. The whole experience of going for a loan to buy a house can ruin the experience for both of you. Have you decided on the amount you will pay as a deposit, as deposit can sometimes even go up to 5-20%?
The lender can demand more in deposit for home loans for a bad credit report, the special thing about the home loan is you are borrowing huge sum as compared to loan you take by credit cards. This is the stand-alone reason which makes a person’s credit report very crucial in the whole application process of getting a loan. Can you make a good deal on a home loan with poor credit history? And, if so, what is the deposit you need to make?
Can you get a mortgage with no credit history?
Yes, you can get a home loan without credit history but it is not a favourable situation for you. The lender will ask for a higher deposit than usual and a high rate of interest. But there is still a chance for you as there are some lenders who work with the people without or with a bad credit report, all you need is to provide them the documents that they demand. List of documents may include- County Court Judgements (CCJs), bankruptcy or Individual Voluntary Arrangements (IVAs) in your credit history. Finding a lender that suits your condition is very important for you.
Can you get a zero-deposit mortgage with bad credit?
Home loans with no deposit can be quite difficult to find if you have a bad civil report, but it is very unlikely to find a lender that is willing to do so. If you can provide a guarantor then things may turn out in your favour. With a guarantor, you can get low deposit home loans which could be about 5% of the loan amount. All you need is to motivate a lender to provide you a loan, so make sure to work on the factor that makes you a good choice to provide a loan. Your income is also a factor that will guide the amount you will get as a loan.
If lenders have no evidence such as credit history or how likely they are to pay it back, there’s no motivation for lenders to offer them a loan. Other factors may affect the decision though, such as your income and the size of the mortgage.
What should I do after being rejected for a mortgage?
In case you are rejected for a loan, there may be several reasons for it- including the amount you ask, or your credit report. For improving your credit reports you can start by repaying the credit on time and take professional help in doing so.
Thus, by maintaining a good credit report as it is a decisive factor in getting a home loan with no deposit.
