Bad Credit?
What is a Bad Credit Mortgage?
Bad Credit Mortgages are for those who have experienced financial difficulties by falling into debt or filing for bankruptcy as this could seriously affect you in finding a mortgage deal. Any bad financial history during this present credit crunch could prevent you from obtaining a mortgage at all.
Sub Prime Mortgages
Lenders used to offer special mortgages to those classed as sub-prime borrowers at a much higher rate than standard deals. Bad credit mortgages were also available to those with County Court Judgements (CCJs) but unfortunately the credit crunch has severely affected this market and many sub-prime lenders are reluctant to consider lending to new borrowers. The deals that are still available now require a much bigger deposit and the rates have substantially increased.
Currently quite difficult to get but not impossible
Those on a sub-prime deal may find that their repayments may rise once their initial deal period comes to an end and for those that require a bad credit mortgage at this present time may find it hard to access as the market is now a lot smaller and a lot more cautious in lending money to borrowers who are classed as a risk .
Sub Prime Mortgage tips:
If you are needing a new sub-prime deal its best to speak to your current lender to find out what they can offer you at the moment. Also seek independent financial advice with a mortgage broker or adviser as he can search a wider market and might be able to find you a better deal.
It would also be wise to consult a bad credit mortgage broker as they will have access to what packages are available on the current market and some deals which are not available direct to the public.
When doing this make a note of any fees payable and how much it is likely to cost and think carefully about what you can afford to put aside for your mortgage repayments and the associated fees. If possible, it may be worth waiting on your lender's Standard Variable Rate until you find a product that suits your current circumstances.
If you have a County Court Judgement (CCJ) bad credit rating, fallen into arrears etc., or have lived at various addresses this may also jeopardize your credit status.
If you have been a sub-prime borrower for over three years and kept your mortgage payments up to date, you should have repaired your credit rating and before the credit crunch you may have been able to access a new deal and return to the mainstream market but under the present situation it is now more difficult.
It is therefore crutial if you fall into this category that before you give up its worth checking with our financial advisor who will push all stops to find a deal to suit you.