UK Bad Credit Mortgages

Major lenders refuse over a million mortgage applications every year. People who have missed a small payment for a book club can find themselves failing credit checks, so it is quite easy to find yourself in a position where you are turned down for a mortgage due to a fall in your credit rating. A bad credit rating is something from which you will find it almost impossible to hide.

Mainstream lenders are being encouraged by the Mortgage Code Compliance Board to start to relax their rules to bring the high street into the grasp of the many people in the UK with adverse credit. At the moment the only option for people with adverse credit is the extremely expensive sub-prime mortgage market, where you could end up paying up to 12% should you be one of the most vulnerable borrowers.

Should you be in this situation, you are not alone, as over 3 million people have a county court judgement (CCJ) against their name. Over 2 million people have been in arrears on the mortgage at some point in their life. Previously, people like this have been marginalised, and forced to pay high charges to get a mortgage with high interest. Recently, though more and more people with adverse credit can get serious consideration from mainstream lenders.

Perhaps the most important advice would be that you should be honest and upfront about your past with a mainstream lender. You should show the lender that you understand why you got into credit problems and how you will try and make sure that you don't again. Remember that lenders do understand that the reason some people get into credit problems could be a one-off problem, such as an illness that stopped you working which doesn't now affect you.

Should that still not work, then you should look into the sub-prime mortgages sector. But before doing so, see if an independent mortgage broker can help you. Independent mortgage brokers should search all of the market to see if they can help you find a mainstream lender.

Taking a mortgage from a sub-prime lender could be expensive but is still a step in the right direction. Should you make all of your payments in good time for a period of about 3 years, then your credit record will start to automatically improve. Once your record is improved you can apply to a mainstream lender again and you maybe more successful. Sub-prime lenders point to this as reasoning for their high charges and interest.

Make sure you read the small print of any sub-prime mortgage to make sure the charges are transparent, taking it will improve your credit record and you can move mortgages without penalty.

 

 

 

 

 

© AskFinancially.com 2008

Mortgages Intro

> UK Mortgages
> Bad Credit
> Best Rates
> Buy To Let
> Cheap Rates
> Compare
> Current Account
> First Time Buyer
> Flexible
> Interest Only
> Non Status
> Remortgages
> Repayment
> Second Mortgage
> Self Certified
> Mortgage Brokers
> Mortgage Calculator
> Advice

Insurance & Loans

Copyright