Bad Credit Mortgages

Finding the right mortgage can be a tough task, especially if you have a bad credit history.
In the current market however, bad credit history should not be a major obstacle: 1 in 4 people in the UK is now considered to have poor credit history, as a result, many lenders are having to adjust in order to accommodate this growing number of bad credit mortgage consumers.

Lenders realise that not everybody can meet the requirements of a standard mortgage, borrowers who've experienced credit problems in the past e.g. CCJ's, IVA's, Defaults or are self employed are unlikely to get approved for a standard mortgage.
As a result, specialist lending arms are set up to cater to this group of people.

Basic requirements for most bad credit mortgage lenders are:

• You are a resident in the UK
• Over the age of 21
• Have an income

Advantages of bad credit mortgages
You invest in your own property as opposed to renting; mortgage repayment are likely to be equal or slightly higher than monthly rent, you can use this equity later in life to move up the property ladder.

Bad credit mortgages can be a temporary solution; after about 3 year, provided you've kept up all your payments and your credit rating has improved, it will be possible to remortgage to a standard mortgage and benefit from a lower interest rate.

How to get a bad credit mortgage
Bad credit mortgages are not that much different from standard mortgages; even if you have a poor credit rating, there is a host of lenders willing to give you a mortgage, so you can have choice.

You may go directly to a mortgage lender, or if you want to widen your choices, use a bad credit mortgage broker: every lender you apply to is likely to do a credit check, multiple credit checks have a tendency to make your credit rating look worse. Therefore, it might be in your interest to use a mortgage broker.

A mortgage broker is an individual (or agency) that assists in arranging funding or negotiates contracts between the borrower and the mortgage lender.

The advantage of mortgage brokers is that they often have access to many lenders, therefore, they'd know which lenders to approach based on your credit rating. With a single credit check they will be able to find quotes from several poor credit mortgage lenders, from which you can choose the quote that suites you.

Most poor credit mortgage brokers will charge a fee for their services but some earn a commission from the mortgage lender, in which case they might not charge you for arranging the loan.

Shop around for a mortgage broker, speak with them but hold off giving out personal details until you feel you can trust them to have your interests at heart and not profit.
Be sure to ask questions, they should explain all the terms, charges and so forth.

Finally, before committing to a quote, be sure to analyse the terms; how will they affect your future plans? For instance, you may want to remortgage once your credit rating gets better. Point out your plans to the mortgage broker or lender.


Similar to bad credit mortgages:
Mortgages for people with bad credit, adverse credit remortgage
IVA mortgage, adverse credit mortgages, Bad credit remortgage