1. Approach a mainstream mortgage lender

Even if you have been declared bankrupt, have fallen into arrears on your mortgage in the past, or have other reasons to suspect you may have a bad credit rating, it makes sense to visit a standard mortgage lender first. They may accept your application and will generally offer you a lower interest rate than a bad credit (or sub-prime) mortgage lender.

2. Shop around

One or two high street mortgage lenders that cater for the mainstream market also have a subsidiary or affiliated company that deals with bad credit mortgages. If such a mainstream lender rejects your application, it may refer you to its subsidiary instead. The best deals may not be available from such lenders however, so it may pay off to seek independent advice.

3. Visit a mortgage broker

A mortgage broker or independent financial adviser should have access to a range of bad credit mortgage deals from all lenders on the market. This will give you a better chance of finding the best deal to suit your needs.

4. Choose the right product

One of the biggest decisions you will make when selecting a mortgage, whether a bad credit deal or not, is whether to go for a fixed rate, a variable rate or a flexible deal. That is, you must decide whether to opt for the security of a fixed rate, which can help you with your budgeting if you are not very financially disciplined, or a discounted variable rate, which may offer lower repayments to start with, but is more risky because your repayments could fluctuate.

5. Repair your credit record

As a general rule, after three years on a bad credit mortgage at a higher interest rate, your credit rating should have been restored to good health. So you should look at remortgaging back to a standard mortgage lender, if possible. However, be warned that this is not as easy as it once was. Lenders have recently become a lot stricter about who they will lend to and how much they will lend. As a result, you may find it more difficult to get a competitive deal.