Adverse
credit
mortgage
If you think
you might
need an
adverse
credit
mortgage,
then it's
best to get
some
information
about what
an adverse
credit
mortgage
really is
and who it
might be
suitable
for. Here's
what you
need to know
about the
adverse
credit
mortgage.
Adverse
mortgages
are known by
many names,
depending on
the lender.
Within the
mortgage
trade they
may be known
as
non-conforming
or sub-prime
mortgages,
in contrast
with the
standard
mortgages
for people
with no
credit
problems.
You will
also hear an
adverse
credit
mortgage
called a
credit
impaired
mortgage, a
non status
mortgage, a
bad credit
mortgage or
a non
standard
mortgage.
Whatever
they are
called they
all indicate
the same
kind of
mortgage
product - a
mortgage
that was
designed for
people with
impaired
credit.
But what
exactly does
impaired
credit mean
when it
comes to the
adverse
credit
mortgage? If
you are
applying for
an adverse
credit
mortgage,
the chances
are that you
will have
previous
mortgage
arrears or
rent arrears
in your
credit
history. You
may have had
County Court
judgements (CCJs)
entered
against you.
You may have
entered into
an
individual
voluntary
arrangement
(IVA) as
thousands of
people are
doing now,
or your
credit
history may
include
bankruptcy.
Getting An
Adverse
Credit
Mortgage
There is
also another
group of
people who
qualify for
an adverse
credit
mortgage. If
you are self
employed,
self cert
mortgages
will be the
only way
that you can
get a
mortgage for
your home,
and this
type of
mortgage is
often
considered
under the
same banner
as the
adverse
credit
mortgage.
So where can
you get an
adverse
credit
mortgage?
Well, there
are a lot of
lenders who
specialise
in this
area,
including
Kensington,
GMAC-RFC and
others, but
depending on
your credit
history you
may not need
to go to a
specialist
lender at
all. A
couple of
CCJs for
small debts
may well be
accepted by
a mainstream
lender;
anything
more and a
bad credit
mortgage
loan lender
is your best
bet.
If you have
applied for
an adverse
credit
mortgage,
you should
expect the
interest
rate to be
higher than
for a
standard
mortgage.
The loading
applied by
the bad
credit
mortgage
company will
depend on
the level of
bad credit.
So a couple
of arrears
and CCJs
will be
penalised
less than if
there is
also a
bankruptcy
or IVA in
the credit
history.
With an
adverse
credit
mortgage,
borrowers
should
expect to
pay at least
one per cent
more than
the standard
rate offered
for standard
mortgages,
but the
loading can
be several
percentage
points.
The good
news is that
an adverse
credit
mortgage can
help you
repair your
credit
history if
you manage
it properly.
A good
record of
prompt
payments
will mean
that your
credit
history
looks much
better
within a
couple of
years. Some
people also
take the
chance to
consolidate
their debts
so that
there are no
other
negatives on
the credit
report. So
if your
credit
history is
less than
perfect,
consider
getting an
adverse
credit
mortgage.
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