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Bad credit is the curse currently affecting vast numbers of the population. Poor credit ratings affect all members of society and not just those in low-income groups.
Adverse credit scores arise by simply missing a credit card payment, failing to pay a utility bill, lapsing on a loan repayment or by defaulting on any form of credit agreement.
More...In light of the growing debt crisis, banks and credit card providers are moving to protect their interests. Credit card providers are reviewing terms of agreement, notably the Royal Bank of Scotland who recently reduced the interest-free period on its credit cards. A move viewed by the London Stock Exchange as “a stealth charge in favour of the provider”.
Obtaining a mortgage therefore is also subject to the strain of our financial climate. For those with adverse credit history, a bad credit mortgage is the only option. Here we will look at the options available to those with a poor credit report and show how your high-risk status affects the terms of a mortgage plan.
For best mortgage deals, visit our best buy tables to compare adverse credit mortgages. We also have a comprehensive list of mortgage providers in our A-Z directory , many of which offer adverse credit mortgages to clients with poor credit history. If you have experience of a mortgage lender we would like to get your opinion, so don’t forget leave your rating. Finally, our Forum page is available should you want to post a message or see what other people have to say about poor credit mortgages.
If you have a bad credit score there are ways in which you can get a mortgage. If you have had no success getting a mortgage through banks directly, finding an independent mortgage broker should be your first port of call.
Many mortgage brokers claim to be independent but are actually tied to a restricted amount of lenders, so check a broker’s credentials in the first instance. Many mortgage brokers will be able to help get you an adverse credit mortgage. A good mortgage broker will have a healthy relationship with many banks and building societies, which means they ought to be able to negotiate a mortgage deal you would otherwise have been unable to obtain.
Mortgage brokers bring a high volume of business to banks each year, so they are able to exert some influence on your behalf. Having a poor credit history will mean the mortgage you get will be at a slightly higher rate of interest but is better than no mortgage at all.
Poor credit mortgages are not as competitive as regular mortgages therefore a small lender is able to charge higher interest rates. Due to poor credit history the lender can offer a bad credit mortgage with interest rates double that of a regular mortgage. From the lender’s perspective, someone with bad credit history is a high risk and as a result, has already been rejected by main providers.
As mentioned above, a good mortgage broker or small lending company may be the best route to finding a mortgage. It should, however, be stressed that there is no substitute for visiting high street lenders. Each lender has their own policy regarding bad credit clients and you may be able to secure a mortgage without paying a broker a fee or by signing up to a plan with high interest rates.
Finally, once you are granted a mortgage, be sure to make every payment on time. It will make refinancing at a later stage easier and at the same time improve your credit rating.
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