adverse credit mortgages

This type of mortgage is designed for people that have had credit problems in the past. This could as a result of previous mortgage or loan arrears, a County Court Judgement (CCJ) or being declared bankrupt. A conventional mortgage application will normally be rejected if any of these are applicable.

Lenders who offer these mortgages recognise that having credit problems in the past is not an indication of future ability to make repayments, however rates may vary depending on the seriousness of previous credit problems.

With this type of mortgage the lender is taking on a higher risk and consequently rates will be higher. A larger deposit than a normal mortgage often between 30% and 35% will also be required. The lender is also likely to carry out a more extensive assessment of the applicants’ income and credit history.

After a few years of successful repayments and no other credit problems a borrowers credit rating will repair and remortgaging to find a more competitive deal may well become an option.

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