Mortgage Loans for People with Adverse Credit

About bad credit mortgages

If you've had financial difficulties in the past and been left with poor credit rating, getting a mortgage can often just turn into a series of rejections. To overcome this you can look at applying for an adverse (bad) credit mortgage/remortgage which is intended to try and help you get back on track.

There are a couple of ways this can be done. If you have equity in your current home this can borrowed against, to either pay existing debts or to raise some cash. Alternatively you can reduce your monthly repayment by remortgaging, however following this latter direction generally means the term of your existing mortgage is extended. Whichever option you choose, the outcome should be a repayment you are able to manage comfortably and the reduction of some of your current debts.

Taking up a bad credit remortgage can assist you in restoring your credit rating. Once your debts are cleared and you have proved your ability to maintain regular remortgage payments, your rating should start to improve.

Whilst this all sounds very positive the downside is that even though your adverse (bad) credit mortgage/remortgage may have lower interest rates, overall you will be paying more interest as the loan period has been extended.

How To Get a Mortgage with a adverse credit history

It's a sad but true fact with so many people hit by the credit crunch and straitened financial circumstances, that there is a growing demand for adverse (bad) credit mortgage/remortgages. Mortgage lenders are becoming more aware of this and starting to provide remortgages for people with a poor credit history.

In the past it was normal to go to a specialist mortgage lender who dealt in bad credit loans. This type of deal was usually conducted through a broker and even today many still offer the most flexible adverse (bad) credit mortgage/remortgages.

Today you have the option of making an application through an independent mortgage broker, and bargaining for the best deal you can get. That is immaterial of whether you go to a mainstream mortgage lender or a traditional bad credit lender.

Brokers are required by law to search through the whole market of available offers to find you the best deal. While some mainstream lenders are starting to offer remortgages to people with bad credit directly, this market is mostly served by a number of specialist bad credit lenders.

These specialist lenders only deal through authorised mortgage brokers. When discussing your needs with a mortgage broker you will be required to supply details of:

  • Your current mortgage.
  • Any other outstanding debts you have.
  • Your income.
  • Monthly outgoings.
  • If you've been declared bankrupt or subject to any other legal action.
  • If you're in arrears with any of your accounts.

When you have supplied this information, the broker will attempt to get the best deal for you, from appropriate lenders. They should then supply you with all the pertinent information about the offer, and their own fees.

Is this Right For Me?

When in desperation an adverse (bad) credit mortgage/ remortgage might seem the only light at the end of the tunnel, but it is not right for everyone. There are always some unscrupulous people who will take advantage of you.

Before agreeing to any formal offer make sure you have read all the finer points of the contract and understand fully how your uptake of this adverse bad credit mortgage/remortgage might affect you.

You should be checking for early repayment fees, what deposit is required, and whether you will be paying more interest long term.

As a word of caution don't apply to lenders that you know will turn you down, each time this occurs it is reflected in your credit history.