My credit rating isn’t the best. Can you help?

If you’re looking for a Help-to-Buy mortgage with only 5% deposit, then, no. Because 5% deposits offer lenders so little security, your credit history must be impeccable.

But if you have a little more to put down, then, yes, it’s possible. There’s a handful of contractor-friendly lenders willing to consider adverse credit.

They use the same contract-based underwriting technique to calculate your affordability. That is, they use an annualised contract figure, not accounts, to make you an offer.

But it’s worth pointing out, the interest rate you pay may be a little higher than for other contractor mortgage products.

The lender is taking more of a risk, thus the higher interest rate. And the chances are, they’ll only offer a repayment mortgage.

It’s a step in the right direction. Lenders have become more sensible about implementing Responsible Lending guidelines in recent years.

Kensington Specialist Mortgage Brokers are one company to extend their subprime product to contractors. There are no guarantees, but they are more lenient than other contractor-friendly lenders.

What’s the importance of a specialist broker?

For all mortgages for self-employed people, you’re better off going through a specialist broker. But for people with poor credit, it’s even more critical that they do.

Every search on your credit file leaves a footprint. If a High Street lender undertakes a search and it fails (which is likely), that footprint is ugly. Moreover, it serves as a warning to others.

What you don’t want to do is give a lender an easy get-out clause. If they see a recent failed credit search, it will ring their alarm bells.

So avoid the High Street. Go through a broker who understands the way you work. You’ll give yourself a much better chance of securing a contractor mortgage with bad credit via a specialist.