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Could an Adverse Credit Mortgage help you?

If you have bad credit and you want to purchase a home, then an adverse credit mortgage might be the right solution for you. Many people have no idea what an adverse credit mortgage is and they could be missing out on a great opportunity to get a home when a standard mortgage is not accessible. Adverse credit mortgages are known by a variety of different names depending on the mortgage lender you decide to use. You will see them referred to as non-conforming mortgages, sub-prime mortgages, credit impaired mortgages, non status mortgages, bad credit mortgages or even a non standard mortgage. They all offer the same service, and that is helping people with impaired credit get a home.

  • Impaired credit means that you have problems on your credit report which could range from arrears on a previous mortgage, late, slow or no payments on credit lines, and even an IVA or bankruptcy. CCJs - County Court Judgements - are also items that can impair your credit history and make it more difficult to get a standard mortgage. But just because you have impaired credit doesn’t mean you are exempt from getting a nice home.

    Having impaired credit is not the only reason why an adverse credit mortgage is helpful. People who are self employed sometimes have problems qualifying for a regular mortgage, making this type of mortgage a viable option. They are also able to qualify for self certified mortgages which are typically lumped under the same umbrella as an adverse credit mortgage. The point however is that anyone in these two particular situations does not have to be left out of buying a home.

    There are many lenders who specialise in adverse credit mortgages including lenders such as Kensington, GMAC-RFC, and more. If your credit history isn’t as bad as you think it is, you may be able to qualify for an adverse credit mortgage through standard lenders and not have to worry about finding someone who specialises in this type of lending. Many mainstream lenders will look at CCJs for a small debt as a non-issue, but anything worse than that, say a bankruptcy or IVA, will require the services of a specialised lender.
Expect to be charged a higher interest rate for an adverse credit mortgage. This is just like applying for a standard personal loan. You have bad credit and you will be penalised for it, but you will also know whether or not you can make the payments on the adverse credit mortgage before you sign the final papers. How the lender looks at your credit record and what it contains will determine how much higher your interest rate will wind up being. You should be prepared to pay at least one percent more than the standard rate that is currently being offered on standard mortgage, but the loading that the lender applies could be several points.

An adverse credit mortgage will help you repair your credit history as long as you pay it on time and do not miss any payments. A good record of payments over the life of the loan will help you in the future if you need any other type of credit line. This could also be a good chance for you to consolidate other debt into one monthly payment and clear any negatives off your credit report. If you can afford the mortgage and you are self-employed or credit impaired, then an adverse credit mortgage could be the solution you are looking for.
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