Adverse Credit Mortgage

Adverse credit mortgages are designed for those who have suffered with a poor credit score. Traditionally those people who have suffered, or are still suffering from a poor credit score found it impossible to obtain a mortgage. Not any more, there are a number of lenders who will provide adverse credit mortgages to those people who need them.

Adverse credit 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. Effectively they all mean the same thing. A mortgage given to a person with a less than perfect credit score.

If you are thinking of applying for an adverse credit mortgage, you should expect the interest rate to be higher than for a standard mortgage. This increase applied by the adverse credit mortgage company will depend on the level of adverse 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 increase can be several percentage points for more severe adverse credit.

Another thing to be considered when applying for an adverse credit mortgage, is that it can help in repairing your credit history. Several years of prompt payments on your adverse credit mortgage, especially if you have been able to consolidate some debts into it, will make your credit record much healthier and may mean you are able to remortgage to a mainstream lender.

For more information on adverse credit mortgages please fill in our contact form and one of our trained advisors will be in contact shortly.