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Whether you are a first-time landlord or an experienced investor with a portfolio of property, if you have found yourself with a bad credit rating, and are looking for a Buy to Let mortgage where your bad credit won’t hold you back, Twin Pine Mortgages has a Buy to Let expert that can support you all the way

Buying a property to rent out can be a good way to earn extra income or a built nest egg for retirement, but if you need a Buy to Let mortgage with bad credit, you might find it more difficult to get the finance in place. However, having a bad credit history doesn’t mean that you won’t be able to find a Buy to Let mortgage lender who is willing to consider your application.


Many specialist mortgage lenders lend to people with bad credit, but they aren't directly available to you as a borrower. That's where Twin Pine mortgages come in, we’re experts in arranging bad credit Buy to Let mortgages. We work with them every day to get mortgages for people from all walks of life and all sorts of different situations.


Bad credit Buy to Let mortgages are similar to bad credit residential mortgages although there are a few differences:


  • The majority of Buy to Let mortgages for bad credit histories are interest only. This means that you only pay the interest every month but not the capital amount on the loan. However, this does mean that you must repay the loan amount at the end of the mortgage term.


  • Bad credit Buy to Let mortgages tend to have a higher interest rate and higher arrangement fees compared to mainstream residential or Buy to Let mortgages.


  • Bad credit Buy to Let mortgages often require that you have a higher deposit – at least 20-25% of the property value. You may find it easier to find a suitable bad credit Buy to Let lender if you have a higher deposit.


  • Buy to let Lenders won’t just look at your credit history when you apply. They will also look at your affordability in much the same way as for standard residential mortgages and this is usually based on your income, outgoings, and your credit file. Your credit history only forms part of the criteria for prospective Buy to Let mortgage lenders.


  • Buy to let lenders also consider the potential rental income of the property you are interested in buying. The lender would expect rental income to be at least 125% of your mortgage repayments. So, for example, if your monthly mortgage repayments are £500 the rent on your property should be at least £625. 


  • The majority of Buy to Let mortgages are not regulated by the Financial Conduct Authority and means you won’t be allowed to rent to a close family member. There are exceptions, though. If you are going to let the property to a close family member, then this is often referred to as a consumer buy to Let mortgage. However, these mortgages are assessed very similarly to residential mortgages. This means having to meet the same strict affordability rules as residential mortgage lending. Consumer Buy to let mortgages are regulated by the Financial Conduct Authority.

Can you get a Buy to Let Mortgage with bad credit?

The answer is yes, but it may be more difficult than trying to get a traditional mortgage and the interest rate could be higher.

We aim to make the process of getting a Buy to Let mortgage with bad credit as simple as possible. So firstly, we will want to take a look at your credit report. By looking over this we can understand exactly when any credit problems happened, who with and by how much. We also try to understand what led up to the credit problem so we can build a positive case to put forward to a prospective lender.


Understanding these areas will help you get a quicker turnaround time and be more likely to lead to a successful outcome. For example: if you were issued a CCJ 4 years ago from a mobile phone provider while you were on maternity leave; this would probably be ignored by our specialist lenders.

Understanding how a buy to let mortgage with bad credit works

Bad credit and poor credit issues come in all different shapes and sizes with some issues being more serious than others. It could be that you were declared bankrupt owing £500,000 or to the other extreme have two missed payments with a mail order company. 


Missed payments are a common way your credit profile can go from good to bad. One ‘blip’ with a reasonable explanation should be OK, but if you’ve missed 3 or more payments over a 12-month period, your options may be limited. If you’ve missed mortgage payments over the last 12 -24 months you could find things even more difficult.


You may be classed as needing a bad credit Buy to Let if you’ve had a payday loan recently, even if your current credit score is good. This is because using payday loans is seen as high cost and is usually only done if people have a gap in their finances and need emergency money quickly. Some of our specialist lenders will still allow a bad credit Buy to Let if you’ve had a payday loan (depending on the amount).


Debt Management Plans indicate that somewhere in the past you’ve had difficulty with your committed payments which will affect your ability to borrow money. However, if you’ve had a debt management plan and made the payments on time, some lenders will allow you to have a bad credit Buy to Let mortgage. Some will insist that the plan is paid off before they will lend and some will be OK with the plan remaining in place. This is where our knowledge of different lenders and their criteria will make a difference in the outcome.


Count Court Judgements (CCJ) are a sign that there has been a dispute between you and a creditor and can put you in the bad credit zone. CCJ’s come in different shapes and sizes but they are typically in two categories; settled or unsettled. If you paid off (or settled) your CCJ within a reasonable time frame your credit profile will look better than an unsettled CCJ. Equally, if there was just one CCJ with a value of £100 or under, your credit profile will look better than three CCJs with a combined value of £2500. The final things that impact whether your CCJ pushes you into a bad credit Buy to Let is how long ago your CCJ was registered and whether the creditor was a communications supplier, utility company or loan company. 


Defaults are one of the most common types of bad credit history we see. A defaulted credit agreement means that you’ve not kept to your contracted payments and is a clear indicator as to whether you should be looking at a mainstream Buy to Let or a Bad Credit Buy to Let. The same sort of criteria around CCJs also applies to defaults. Meaning that how long ago you defaulted, the amount of the default, whether the default is paid off or still outstanding and who you defaulted with are all taken into account.


Bankruptcy and Individual Voluntary Agreements (IVA) are often seen as more serious bad credit problems. If you have been made bankrupt, you are not able to borrow money until you’ve been discharged. Lenders will want to understand what led you to be declared bankrupt and how long ago it happened. They will want to see evidence that you have been discharged and what your credit profile looks like since then. If you have been declared bankrupt within the last 6 years, you will find it almost impossible to find a mainstream lender for your Buy to Let mortgage. But again, with some expert help and support, Twin Pine Mortgages can arrange bad credit Buy to Let mortgages for customers who were discharged just 12 months ago.

The impact of bad credit on a buy to let mortgage


For landlords looking to purchase or remortgage a buy to let property, having a bad credit history can be a major obstacle to securing a mortgage. Bad credit can negatively impact your ability to get approved for a mortgage, and even if you do get approved, it can result in a higher interest rate, making the mortgage more expensive.


One of the main ways that bad credit can impact a buy to let mortgage application is by reducing the number of lenders that are willing to work with you. Many mainstream lenders have strict credit score requirements, and may reject your application outright if you have a history of missed payments, defaults, or CCJs. This can limit your options and make it harder to find a lender who is willing to offer you a mortgage, but this is where we can help.

It is also worth considering the impact of a poor credit rating on the profits you can make with your portfolio. Lenders view borrowers with bad credit as higher risk, and may charge a higher rate to offset that risk. This can make your mortgage more expensive over the life of the loan, resulting in higher monthly payments and less profit from your rental property.


Having bad credit can also impact the amount that you are able to borrow for a buy to let mortgage. Lenders typically assess your credit history, income, and other factors to determine how much they are willing to lend you. If you have bad credit, they may be less willing to lend you as much money, which can limit your ability to purchase or invest in additional properties.


Overall, having bad credit can make it more challenging to secure a buy to let mortgage but it’s by no means impossible. There are steps that you can take to improve your credit score and increase your chances of getting approved for a mortgage with better terms and a lower interest rate.

How to increase your chances of securing a Buy to Let mortgage with a poor credit rating.

The best place to start when trying to improve your chances of being accepted for a Buy To Let mortgage with a bad credit history is to understand your credit profile. There are lots of ways to get hold of your latest credit report, often for free, making the process a lot easier from the start. If you know the exact dates of when bad credit problems happened and what the values were involved you can save a lot of time and effort by not approaching lenders where you don’t meet the criteria.


Get together the facts about why the bad credit issue happened. Lenders will want to know whether something was going on in your life that caused the issue and how likely it is to happen again. Being open and honest is important. The lender will be a lot more open to looking at your case if they have all the facts and a complete picture on which to make a decision.

Tips for Improving Your Credit Score as a Buy to Let Landlord


Don’t get lots of searches - don’t blindly go online and start getting lots of agreements in principle, as you could do more harm to your credit profile. If you go to lender after lender and keep getting rejected, other lenders will be able to see this on your credit profile.


Get expert help and support - it is often difficult to know whether or not you would be accepted by a lender for your given bad credit issue. Lenders do not always advertise all their lending criteria, and even when they do it can be complicated. Twin Pine Mortgages have access to specialist tools and can get to see all the lenders' criteria. We have also built up relationships with each specialist lender if we need to check how they would view an application. All this means you are more likely to get accepted the first time, more quickly, with a competitive deal.


Pay off bad debt with low balances - if you have defaults or a CCJ  with a very low balance it would be a good idea to clear it from any savings or excess income. Showing that you have taken action to make good on any bad credit issues can go a long way.


Stay within your agreed credit limits - this may sound obvious but can often be overlooked when you don’t stay on top of your financial planning. Making sure that you don’t go over your credit card limit and staying within any agreed overdraft for at least 3 months before any mortgage application can improve your chances of success.


Do the basics - make sure you are on the electoral (voters) roll. Make sure everyone has your correct name if it has changed and ensure that all your creditors have your correct address. All these things will help to keep your credit score as high as possible. It’s also a good idea to keep a lookout for any fraudulent activity on your credit profile and get any problems or inaccurate data corrected.

Bad credit Buy to Let mortgage lenders; why choose Twin Pine Mortgages?

Whether you already have years of experience in buying an investment property or this is your first move to becoming a landlord, the mortgage market can still be difficult to navigate. With ever more deals out there and changing laws and regulations, we can be on hand to help.

With many high street lenders limiting the number of investment properties they will accept per individual we have the know-how and expertise to help you grow, refinance or discuss the next big project.

Many accountants will also now advise arranging Buy to Let finance as a limited company. We can work with you, your accountant and others to work out the pros and cons of any given scenario.

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