Adverse Credit mortgages

What is an Adverse Credit Mortgage?

High-street lenders will often decline your mortgage application if you have had financial difficulties in the past. There are however, lenders who do specialise in providing adverse credit mortgages to people who have had such difficulties.

Adverse credit lenders make mortgages more obtainable for those with a poor credit history or bad credit rating allowing mortgages to be obtained by everyone no matter what your credit status.

The primary reason for being refused a mortgage may be because your name appears on a credit blacklist. A poor credit rating or adverse credit history can result in a traditional mortgage application being rejected. If a borrower has a history of poor credit usage then they are often described as Sub Prime. Adverse status can result from any of the following:

1. Mortgage or loan arrears

1. County Court Judgement (CCJ)*

1. Bankrupcy

These are not the only causes of credit problems. Credit checks can often show some minor problems with your credit record such as:

1. Absence of a credit record

1. Incomplete work or income history

1. Not appearing on electoral roll

1. Late bill payment

1. Debts incurred as a student

*A ruling by a County Court against a person who has not satisfied debt payments with their creditors is known as a CCJ. The ruling remains on the persons financial credit history profile for a period of seven years. Failure of an individual to make payments at the correct time or to not comply with the lender's requirements is known as a Default.

Can I get an Adverse Credit Mortgage?

If you have a poor credit history it doesn't mean you can't get a mortgage. There are many lenders that specialise in lending to people with adverse credit status.

If you do have poor credit then with a large enough deposit you should be able to obtain an adverse credit mortgage. You will then be on route to repairing your credit rating. Interest rates may be a little higher because the lender views the borrower as a higher risk which protects the lender should the borrower default on mortgage payments.

If you have remained with your lender for around three years, made your mortgage repayments reliably and have no outstanding CCJs or defaults, then your credit rating may have been repaired enough to obtain a conventional mortgage. This should be as simple as remortgaging from any standard mortgage.

Some lenders offer credit repair mortgages. These help you improve your credit rating if you make regular repayments. After a number of years, your annual interest rate is reduced and will revert to the lender's standard variable rate, providing you have maintained a clean credit record throughout that period.

For more information please call or complete the Enquiry Form.