Mortgages with Poor Credit Rating

When applying for a mortgage, it is standard procedure for a lender to have your credit rating checked. If your credit rating is poor, it will be more difficult to obtain a mortgage. High street banks usually avoid customers with a low credit rating. Causes of a bad credit rating may include failure to make mortgage repayments, high credit card debt, County court judgments (CCJs), and bankruptcy. Fortunately, there are many UK lenders that specialize in bad credit mortgages.

Credit Rating

A lender will carry out a detailed credit check. Credit rating allows lenders to make sure you are worth the risk of lending. Lenders will analyse your income and spending. They will use one of the two major credit reference agencies, Experian or Equifax. These agencies contain financial information used to grade your credit. They will know if you have had any past financial problems. It is important not to apply to lenders that you know will reject you. Every credit check is noted and too many checks will reduce your chances of getting a mortgage.

Check your Credit Rating

If you want check your own credit rating before applying for a mortgage, you can access your credit record using Experian.co.uk, Myequifax.co.uk, and Checkmyfile.com. It is beneficial to consult with a bad credit mortgage advisor. These advisors have access to all of the bad credit mortgage deals available on the market. There are many bad credit mortgage lenders catering to individual cases. All of them offer mortgage alternatives for bad credit mortgage borrowers who do not meet the standard mortgage criteria.

Credit Repair Deals

Having a poor credit rating can be a disheartening experience, but you can find deals out there. Specialist poor credit lenders can offer credit repair deals. With a credit repair deal, there is a higher interest rate than a conventional mortgage. You will also be required to put down a deposit. Normally, a deposit is about 10%. Once you have maintained your payments on one of these deals for about three years, your credit history will be repaired. You can then remortgage back to a high street bank for a better deal.

Adverse Credit Mortgages

An adverse credit mortgage gives people categorized as non standard the option to buy or remortgage a property and rebuild their credit rating. You will find that interest rates are slightly higher than high-street lenders. The higher interest rate reflects the increased risk taken by the lender. Redemption penalties exist but are now being modified to be more in sync with other products. Many lenders offer fixed rates that are only a bit higher than high-street prices.

Considerations

Whether or not you have a bad credit record, you should be able to get a mortgage. It is just a question of how much more you will have to pay. That is, how much higher the interest rate on your mortgage payments will be. If you are worried about your credit situation, talk to a professional mortgage adviser who specializes in this area.