Credit Score Basics > How does Accord Mortgages work?

How does Accord Mortgages work?

Wollit Team3 minute read · Updated 30th June 2024

Accord Mortgages is a mortgage lender part of the Yorkshire Building Society, the UK’s third-largest building society.

Founded in 2002, it provides various mortgage products, including fixed-rate mortgages, tracker mortgages, and buy-to-let mortgages.

One thing to keep in mind when looking into Accord Mortgages: their mortgages are only available through intermediaries means you cannot apply for a mortgage directly from Accord.

Does Accord Mortgages work with people with bad credit?

Yes, Accord Mortgages works with customers with credit history issues.

They claim to do this by looking at individual circumstances rather than automating the approval process.

Here is how different adverse credit items in your credit history can influence your eligibility when applying for a mortgage provided by Accord:

History of late payments: accepted;
Missed payments: maximum one missed payment in the last two years;
CCJ (County Court Judgment): accepted if satisfied more than three years ago;
DMP (Debt Management Plan): accepted if completely satisfied;
IVA (Individual Voluntary Arrangement): accepted if satisfied more than six years ago;
Bankruptcy: accepted if discharged more than six years ago;
Home repossession: accepted if it happened over six years ago;
Had multiple of these issues: also accepted.

As you can see, Accord Mortgages is quite flexible when it comes to dealing with people who have bad credit histories. This doesn’t necessarily mean that they’ll offer great terms (expect higher interest, etc.), but it is an option.

What kind of mortgages does Accord offer?

Accord Mortgages offers a wide range of mortgages:

Residential mortgages for first-time buyers, home movers, and remortgagers;
Fixed-rate mortgages with interest rates fixed for an initial period of 2 to 10 years, which then revert to Accord's standard variable rate after the fixed period;
Tracker mortgages: These have interest rates that track the Bank of England base rate for an initial period, typically two years, after which they go back to Accord’s standard variable rate;
Interest-only mortgages: Here, you only pay the interest portion during the mortgage term and then pay the loan amount in full at the end of the term;
Part interest-only, part repayment mortgages;
And even buy-to-let mortgages for purchasing or remortgaging rental properties.

How much could I borrow from Accord Mortgages?

The maximum loan amount with Accord Mortgages is £500,000. How much you can borrow depends on many factors:

Accord typically lets you borrow up to 5 times your gross salary.
However, if you have a high income and good credit, you can borrow up to 5.5 times your salary, while if you have bad credit, you might only be offered up to 4.5 times your salary.
Mortgages can go up to 95% LTV, meaning you might only be asked for a deposit as low as 5% of the property value.
If you remortgage, you can get deals at other LTV ratios, including 100% and 120% for those in negative equity (negative equity is when your property is worth less than what’s left to be paid on your mortgage).

Accord also launched a new low deposit scheme this year:

The new low deposit scheme requires a deposit between 5% and 1% of the property price, with a minimum mortgage amount of £95,000 and a maximum of £495,000.
The most you can borrow is capped at 4.5 of your annual salary.
You can also get a five-year fixed rate below 6% with no arrangement fee and a free property valuation.

However, this low deposit scheme has a catch: it’s only available to first-time buyers with good credit scores.

How do I get a mortgage from Accord?

You can’t apply for a mortgage directly with Accord Mortgages. Accord only lends through brokers (or “intermediaries”).

If you’re looking for a mortgage but have bad credit, the best solution is to go through a mortgage broker. Depending on your situation, they might recommend a mortgage from Accord or a different one.

However, if you’re in this situation, we recommend you don’t rush into getting a mortgage and rebuild your credit history first. This will allow you to get the mortgage you want on much better terms.

There are also many tools available to rebuild your credit history, from credit-builder cards to credit-building apps.

One such app is Wollit. Wollit is a new kind of credit-building tool which reports your monthly fixed fee subscription as a loan repayment to the credit reference agencies.

This helps you build your credit history and improves your credit score without unexpected fees or other risks.

It also reports your rent payments to Experian. This not only lets you show future mortgage lenders you’re responsible and you pay your bills on time, but it also gives you another way to improve your credit file while you rent and prepare for a better mortgage.