Getting a bad credit mortgage
It's perfectly possible to get a mortgage even if you have a poor credit rating. Be prepared, though, to pay a higher rate of interest and maybe to be charged a sizeable arrangement fee.

But how does credit rating work? Like this: when you fill in an application form for a loan, a credit card, bank account, mortgage or other form of borrowing, you are awarded points depending on your answers. This is your credit score, or rating. It helps the lender decide how much of a risk they will be taking in lending you money, and how much they feel it would be safe to lend you. If your credit score reaches a certain level, then you pass the test. If not, then the lender might decide not to lend you anything, or stipulate a lower amount, or charge you a higher rate of interest.

The lender will also run a credit reference check on you. This involves looking at your past borrowing history. Obviously, a good record will help with future applications.

Buy-to-let traps...
Take a look at what you can do to avoid falling into common buy-to-let traps.

Be realistic when planning what you can afford. Make sure you will be able to cope if there is an unforeseen rise in costs such as your mortgage repayments, or extra expenditure on repairs. A fixed rate mortgage will help you to plan financially.

Don't rely on there being no fallow tenantless periods. There may be gaps when you have no income from the property. Plan for this eventuality. It might be worth employing a letting agency: the fees charged may be offset by the flow of tenants it can generate.

Don't stake everything on making a profit by selling the house at a particular time. It might fall at a very bad time to sell. So make sure you have the funds to sit out a slump in property prices.

Location, location, location. Take advice and do your research. A letting agent can recommend good areas to buy within, and the type of property that is easily rented out.

Bad tenants - the landlord's nightmare... Take care who you lend to, by meeting face to face early on and taking up and cross-checking references. Again, a letting agency is experienced in vetting tenants. Let your property on an assured shorthold tenancy, which affords you the right to evict a tenant on two months notice.

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