So, you've got a bad credit record. Perhaps you've missed a few credit card payments, have had a County Court Judgment awarded against you or have previously been made bankrupt - but this doesn't mean you can't get a mortgage. Interest rates on bad credit mortgages are higher than standard mortgages and you will probably need a larger deposit, but at Professional Mortgage Services we utilise our specialist knowledge on providing mortgage solutions for clients that don't typically fit the traditional lender's criteria.
Bad credit mortgages can help people with poor credit ratings get a mortgage, they are also known as sub-prime mortgages or adverse credit mortgages. Bad credit mortgages are the same as standard mortgages, but are more widely available to people who would fail their standard lender credit checks. Interest rates and charges tend to be higher as people with poor credit ratings are deemed to be a higher risk.
Bad credit mortgages are suitable for people with poor credit ratings. A poor credit rating could be caused by missed or late credit card payments, missed mortgage payments, defaults, county court judgments or even bankruptcy.It is always a good idea to have a look at your credit report before you apply for a bad credit mortgage.
Bad credit mortgages are the same as standard mortgages, but have higher interest rates and charges. You will also probably need a larger deposit percentage of the property value. Many types of mortgage deals are available at fixed, variable, or discounted rates. After a few years of paying a bad credit mortgage on time it should 'repair' your credit rating sufficiently to be able to move to a standard mortgage and a lower rate.
As a result of the global credit crisis there are fewer mortgages available and some UK lenders have stopped offering mortgages for people with bad credit ratings. Many lenders now require people to have a higher deposit and interest rates and charges have also now increased.
Before looking for any mortgage it is a good idea to check what is on your credit reference agency file to see if you have any credit problems. It's essential that you compare the total cost of different mortgages, taking into account fees and charges. You should also avoid making lots of applications for credit, as these searches will affect your credit rating.