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In some cases it may be difficult to get a mortgage, for example, if you are self-employed or have had debt problems in the past. You might also be turned down if there are problems with the property.

If you are in this situation, don’t despair - a specialist lender may still be able to help you. However, you should also think carefully about whether a mortgage is realistically affordable for you. Mainstream lenders are often reluctant to lend to ‘high risk’ or ‘sub prime’ borrowers because there is a greater chance of borrowers not being able to afford the repayments.

Consider your options carefully and don’t put your home at risk.

What if I have no money for a deposit?

Most lenders are unlikely to lend you 100 per cent of the value of the property, even if you could afford the repayments. Major high-street lenders will typically lend you up to 90 or 95 per cent, though first-time buyers will need to come up with a deposit of anywhere between 20 and 30 per cent (in some cases even more).

If you borrow more than 90 per cent you may have to pay for a mortgage indemnity guarantee (which protects your lender, not you). This may be referred to as a ‘high lending charge’ and could involve a one-off payment of around 1.5 percent of the agreed purchase price.

If the lender will not lend you as much as you need, you may be able to get a top-up loan from an insurance company or bank, but you should be very wary of overstretching your finances in this way. And if you borrow 100 per cent of the value, you run a greater risk of falling into negative equity (where your home is worth less than what you owe), or of not being able to meet the repayments if interest rates increase. Remember that property prices can fall sharply in a recession.

Can I get a mortgage if I'm self-employed?

If you are self-employed or have an irregular income, you will usually need to provide the lender with accounts for the last three years. You may need to go to a mortgage broker to find a lender who specialises in borrowers in your situation, rather than use a high-street lender. You may also have to find a larger than normal deposit.

When working out what you can afford to borrow, you should take into account the possibility that your income could fall in future as a result of illness, injury, or economic issues. It is usually best to borrow cautiously and set aside enough savings to cover your mortgage repayments for a while if you run into problems. 

Can I get a mortgage if I'm near retirement?

Some lenders may be concerned that you won't be able to keep up the payments once you retire, but a broker may still be able to help you to find a mortgage with a specialist lender. You may have to accept a mortgage with a shorter term (which will mean higher monthly payments).

Can I get a mortgage if have a poor credit record?

After you apply for a mortgage, your lender will usually run checks with credit reference agencies to make sure that you have not been repossessed in the past, or that you don’t have a history of bad debts.

If you are in doubt, you should check what information each of the main credit reference agencies, Experian, Equifax, and Callcredit hold on you. A credit report costs £2, although sometimes agencies offer free reports.

You should also check that the details each agency holds on you are correct. If you can prove that they are not, you can get the agency to correct your record and inform the lender that there was a mistake.

If you have a poor credit record, a specialist broker may still be able to find you a lender. However, it is important to avoid any lender which charges an excessive rate of interest, as there are many unscrupulous lenders targeting borrowers who have a poor credit rating, or irregular incomes.

You should only consider taking out a mortgage if you are certain that your financial problems are a thing of the past. Working out a detailed budget and getting financial advice could save you from overstretching yourself in future.   

Can I get a mortgage if I have a low income?

If you are on a low income it is important to consider your options very carefully before deciding whether or not home ownership is for you. A home ownership scheme (such as shared ownership) may be more suitable for you. These schemes are usually run by local councils and housing associations.

You may be able to get a loan to buy the home you currently rent or,  you can buy a share of another property and pay rent on the remaining share. Usually you have the right to buy the remaining share if and when you can afford to.

What if there are problems with the property?

You may hit problems with the lender if the property you want to buy is:

• in poor repair
• leasehold with only a few years left on the lease
• not a typical house or flat (for example, it's a flat over a shop)
• built of unusual materials, rather than brick and tile.
  

For properties like this, ask an independent financial adviser, or a mortgage broker which lenders are most likely to accept your application. You may have to pay a slightly higher than average rate of interest, or have a larger than normal deposit.

What can I do if I'm turned down?

Your mortgage application may be rejected because of your income or employment status or because of problems with the property. It may be worth applying again to a different lender, though you may have to tell them that your previous application was refused.

A financial adviser or mortgage broker may be able to help you to find a suitable lender. Always check the Financial Services Authority’s (FSA) register to be sure that any financial adviser or broker that you use is authorised.

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