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Adverse Credit Mortgages
What are adverse credit mortgages?
An adverse credit mortgage is also known by the following names.
They all refer to the same basic type of mortgage, namely one where the applicant has a history of bad credit.
- Adverse Credit
- Bad credit loan
- Non standard mortgage
- Poor credit loans
- Credit impaired loans
There are therefore many different names for it but it can just really mean at the end of the day that there is just another way to go about obtaining a loan should this apply to you.
Do you need to apply for an Adverse Credit Mortgage?
Adverse credit mortgages are for people who have an adverse credit history.An adverse credit history could include:
- County Court Judgements (CCJ's)
- Mortgage or rent arrears
- Self employed - Although you can apply for a self certificate mortgage
- Decrees (Scotland)
- Bankruptcy
- I.V.A
- Trust deeds
Lenders may even turn you down if you have changed address many times or if you are an entrepreneur without 3 years worth of audited accounts. Self-employed borrowers may have to apply for a mortgage via specialist lenders but may also apply for what is termed self-certificate mortgages, meaning they declare their earnings without having to provide evidence of a set guaranteed salary.
It is estimated that one in four British people would not qualify for a standard mortgage from a high street lender. (Source: Council of Mortgage Lenders: - 2004) This means they require specialist lenders in order to acquire a mortgage.
Demand for adverse credit mortgages has risen and so too has the number of lenders catering for this need in the UK today with some mainstream lenders who now will consider lending to people with an adverse credit history.
Pro's and con's of an adverse credit mortgage
Lending money is all about risk. A Lender will weigh up the risk factor of lending money to an individual and decide whether they are likely to get their money back with interest without too much bother. Some lenders will simply not lend to high-risk category borrowers, others will and adjust their interest rates accordingly. This means you may have to pay higher interest rates on your mortgage. On the positive side you get a home to live in that belongs to you, and if you repay you mortgage back as required by the lender, after three years your credit history will have benefited considerably.
Climbing the ladder to owning your own home bad debt free
This means that after three years you could remortgage (switch mortgage lenders) to a high street lender and enjoy massive savings on discount interest rates. It's all about climbing the ladder from adverse credit history and no property at the bottom to positive credit history and ownership of property at the top. We specialise in adverse credit mortgages and remortgages and you can contact us here for free with no obligation to complete the deal. Just either give us a call on 0844 800 1137 or use the brief ENQUIRY FORM and see how we can help you.
