Bad Credit Mortgage

If you previous credit problems have seen you being declared bankrupt or had county court judgements lodged against you then your credit rating will be extremely poor or non existent. Therefore, due to this low rating, only a selection of specialist lenders will allow you to apply for a traditional mortgage. However, having a bad credit rating doesn’t automatically mean that you won’t be approved by a specialist lender for a mortgage. There are many specialised loan companies that have been set to specifically target the financial market to offer “Bad Credit Mortgages”.

A Bad Credit Mortgage is typically a mortgage that is issued by a lender or a specialised financial company, which is secured against your property. They work in exactly that same way as a traditional mortgage whereby it is a loan that is secured against a form of your property. This provides the lender with less risk when approving this type of loan. A Bad Credit Mortgage is usually used to fund buying a property; however a mortgage can be extended to provide additional funds that can be used to fund a variety of things such as home improvements or debt consolidation.

If you have a low credit rating, it’s often due to having had previous county court judgements lodged against you where you have failed to pay past debt or have had some type of payment arrears. Bad credit mortgages are targeted to this specific set of people who have a poor credit history as they often have no other method of raising finance. These types of loans create an area of specialised finance. It’s in this particular financial market that bad credit doesn’t necessarily equate to being declined for a mortgage as these types of mortgage are targeted to people who have a bad credit rating.

If you are considering applying for a Bad Credit Mortgage, it’s often best to check first with a specialised loan company through the internet. It’s mainly through this search that you will find a lot of information from a number of lenders who are willing to lend to people with a poor credit history. If the amount of information available is confusing or simply to much to take in, it can be in your interest to contact an independent financial advisor to discuss in more detail your exact requirements. However, most specialised loan companies will be able to offer you a more in-depth service as they are the experts in this area. It is often beneficial to you to compare lenders and what they can offer you in terms of mortgage deals. This could mean that you are able to get a lower interest rate by shopping around. Whichever lender you choose to apply to for the mortgage, your credit history will always be checked using the lenders individual credit scoring system.

All lenders perform a mandatory credit search on applicants which provides them with a full set of information on your financial history. If you are purchasing a property, the value of the property will also be assessed by the lender. This enables them to check the value of your home and your eligibility in the amount of mortgage you have applied for; they will then be able to check if the amount of mortgage you have applied for is in accordance with the value of your property.

You can borrow from as little as £1,000.00 to in excess of £100,000.00 depending on your circumstances. The amount the lender approves for you to borrow will depend on your current financial situation and the value of your property; the lender will also check how much existing debt you have and your monthly expenditure in comparison to your monthly income.

Interest rates on a Bad Credit Mortgage are quoted as an Annual Percentage Rate (“APR”). For these types of mortgages, you should expect to pay higher interest rates than traditional mortgages due to the risk associated with this type of lending.