Mortgage Information

Mortgage Types

Adverse Credit Mortgages

Adverse credit mortgages can often be referred to as a bad credit mortgage.  These types of mortgages are designed for those who have a poor or bad credit history.

This mortgage type has been around for a few years now as lenders and other mortgage providers have realised the potential in this market segment.  In addition lenders are able to command better returns due to potential increased risks to them.  It is of only recent that the more commercial high street lenders have introduced adverse credit mortgages to their product portfolio as a result of the current state of the UK's credit lending status.

Why do I have a bad credit history?

If you don’t know all ready then you must take immediate steps to take hold of the situation you are in.  Firstly obtain your latest credit file report, this is quite straightforward and can be carried out online through agencies such as Equifax and mycreditfile to name a few.  Once you have registered and provided the necessary information you will be able to see your credit score and identify key areas that you need to address.

In general your credit history will be affected by your historical actions in relations to dealing with the credit that has been made available to you.  Not keeping up with your regular payments will certainly work against you.  Other factors such as CCJ’s, bankruptcy and other defaults will weaken your credit score thus affecting your credit worthiness.

Does this mean I cannot get a mortgage?

The positive aspect is that there will be a lender prepared to provide you with a mortgage even though you have a bad credit history, however be prepared to pay financially for this privilege.  Shopping around for the best interest rate can save you thousands of pounds in the long term.

Where can I apply for an adverse credit mortgage?

Applying for an adverse credit mortgage is slightly different to traditional mortgage applications.  You need to realise that you are starting with a bad credit status and your objective should be two fold, one to obtain a mortgage and secondly not to worsen the situation.

Ensure you don’t make applications to those providers who may reject you as this will be shown on your credit file.  It is important to identify a range of specialist providers who specifically cater for your circumstances.

It is important that you do not accept the first adverse credit mortgage offer as by simply comparing a few quotes, you can save money and get the best deal.

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