Getting a mortgage

Aim of this information

For many people owning their own home is something to aspire to. Renting can be seen as ‘lost money’ as you’re likely to pay the same in rent as you would for a mortgage but never own your own home. Renting can provide you with less security than owning your own home and may mean that you’re unable to make any alterations that turn a house into a home.

If you have an unspent conviction, then getting a mortgage or associated insurance product can cause problems and this information sets out how to deal with some of these issues.

It forms part of our information section on housing.

Why is this important?

Under the Rehabilitation of Offenders Act 1974, ‘spent’ convictions do not have to be disclosed to banks, building societies or mortgage brokers, irrespective of what questions they ask. However, if your conviction is ‘unspent’ then you will need to disclose it if you’re asked to do so.

Knowing what you legally need to disclose will ensure that you get the best mortgage for your needs and that you don’t run the risk of having your mortgage agreement or any insurance policy invalidated.

Obtaining a mortgage with a criminal record

Many mortgage experts say that it’s impossible to get a mortgage if you have a criminal record. However, in our experience, if you shop around you may be able to find one.

If your conviction is spent under the Rehabilitation of Offenders Act 1974, then legally, you do not need to disclose any information about previous cautions and/or convictions and, a lender will not be able to take them  into account when deciding whether to offer you a mortgage.

To work out whether your conviction is spent you can use our Disclosure Calculator.

Disclosing information about an unspent criminal record

The onus is on the lender to ask you about your convictions or criminal record. If they ask, then you are bound by a ‘legal declaration of truth’ and you must answer all questions accurately and truthfully.

If you’re asked about convictions and you fail to disclose one that is unspent then this could potentially lead to a further conviction if you were found to have lied. Also, if the lender were to find out, your mortgage agreement could be invalidated as well as any insurance policy connected to it.

You should bear in mind that it’s possible that a solicitor or mortgage broker who handles mortgage transactions may pass on information about your criminal record to the mortgage lender. The Law Society recommend that solicitors should pass on any ‘material facts’ to a lender.

What questions do lenders ask?

The majority of lenders will ask about criminal records. The questions vary, but some examples we’ve seen include:

“Have you ever been convicted, or have any prosecutions pending for any criminal offence (other than motoring offences)?”

or

“Have you or members of your family, or anyone normally residing with you, been subject to any declaration of bankruptcy, been convicted of, received a police caution for, or charged with (but not yet tried for) an offence (other than driving offences)? (Please note, convictions spent under the terms of the Rehabilitation of Offenders Act 1974 do not need to be disclosed). If Yes: please give details”

The first question is quite broad and suggests that you have to disclose spent convictions as well as unspent. However, under the Rehabilitation of Offenders Act, you do not have to disclose spent convictions and so if your criminal record is entirely spent, you would be entitled to answer “no”.

Some lenders will ask you to provide details of addresses over the past six years. If you’ve spent any significant periods of time in prison, this could flag up gaps in your address history and may mean that you’ll need to disclose your criminal record, even if you’ve not specifically been asked about them.

Applying to a mortgage provider directly

One option when applying for a mortgage is to apply directly to a lender. We have set out below a table listing the questions that some mortgage providers ask in relation to convictions.

In putting this table together, we’ve looked at guidance provided to mortgage brokers (intermediaries) by the mortgage companies, which sets out their ‘lending criteria’. This advice is designed to help mortgage brokers understand whether a particular mortgage provider would accept a particular client. However, many of the big mortgage companies have specific sites for brokers which are not accessible to the public.

Many lenders offer applicants the chance to apply for an ‘in principle’ mortgage which often doesn’t ask about criminal records. However, when you go on to complete the full application form, you will normally find that the lender will ask you to provide details of any unspent convictions, so be prepared!

Applying for a mortgage via a broker

For many people, the easiest way to apply for a mortgage is through a mortgage broker. If you’re upfront and honest with the broker about your criminal record, they’ll be able to concentrate their efforts on finding you a lender whose criteria you meet. Many brokers will have dealt with other customers who have a criminal record and should be quite knowledgeable about where your application is likely to be the most successful. Brokers must be registered with the Financial Conduct Authority.

What happens when you disclose unspent convictions?

Each lender will have their own lending criteria and the majority will deal with the disclosure of any unspent convictions on a case by case basis.

We are always keen to hear about the experiences of individuals who have applied for a mortgage with a criminal record as it helps us to improve our information to others. Let us know how you get on by emailing advice@unlock.org.uk.

What checks do mortgage companies do?

Mortgage companies do not generally check criminal records. They do not have access to the Police National Computer, and usually rely on the information you provide on your application form.

If a mortgage company wanted to get official confirmation, they could ask you to provide them with a basic disclosure, which would reveal unspent convictions.

The majority of lenders will do credit checks and will also check the CIFAS Register to check for any issues relating to fraud, money laundering or other financial crimes.

Most lenders will refuse anybody who has a poor credit rating as they need to be confident that you will be able to repay the loan. They will need to see evidence of stable employment, whether you’ve been able to repay loans in the past and whether you’ve had arrears for mortgage or rent.

Checking the information lenders hold about you

You are able to ask a lender to provide you with the details of all information they hold about you under the Data Protection Act. This is referred to as a subject access request and costs £10.

Insurance

For people with unspent convictions getting household insurance such as buildings and contents can be difficult. For a mortgage provider, buildings insurance is usually a requirement of them giving you a mortgage.

Some mortgage providers offer insurance alongside their mortgage product. You are not required to take this insurance, and particularly if you haven’t had to disclose your conviction to a mortgage broker, you may want to source your own cover separately. We have a list of insurance brokers that may be able to assist you.

Discuss this with others

Read and share your experiences on our online forum.

Key sections include:

• Applying for a mortgage

Useful links

Below you will find links to useful websites relating to this page. More specific details including addresses and telephone numbers) of some of the organisations listed below can be found here.

• Association of British Insurers (ABI) – The ABI provides consumers with general information on insurance and savings products
• Financial Ombudsman – The Financial Ombudsman is the UK’s official expert in helping individuals sort out problems with banks, insurance and pensions
• Money Advice Service – The Money Advice Service provides free and impartial money advice
• Money Supermarket – Money Supermarket have a range of useful guides on their website relating to a range of financial products.
• Compare the Market – Compare the Market have a range of useful articles and a mortgage eligibility calculator to help you work out how much you can borrow.

More information

1. For practical information – More information can be found under our section on housing
2. To read personal stories – You can read stories about this posted on theRecord, our online magazine, under the tag housing
3. To discuss this issue with others – Read and share your experiences on our online forum
4. Questions – If you have any questions about this, you can contact our helpline.

Get involved

Help us to add value to this information. You can:

1. Comment on this page below
2. Send your feedback directly to us
3. Discuss your views and experiences with others on our online forum
4. Share your personal story by contributing to our online magazine, theRecord