It's not as hard as it once was to find a bad credit mortgage lender. With an increased number of UK residents looking for bad credit mortgages, there are more and more lenders providing bad credit mortgages or sub prime mortgages to meet the high demand. Bad credit mortgage lenders cater to those who have poor credit histories, CCJs (County Court Judgments), mortgage or rent arrears, decrees, bankruptcy, or IVAs. These lenders are willing to accept the larger amount of risk associated with lending to someone with poor credit history.
A sub prime mortgage and a bad credit mortgage are basically the same thing. Bad credit mortgages are also known as nonstandard mortgages, credit impaired mortgages, non status mortgages, and adverse credit mortgages. When you have any of these things on your credit report, you do not meet the traditional criteria for mortgage lending, so you'll have to find a bad credit mortgage lender. Since the amount of risk involved with lending to you is higher than the amount of risk associated with lending to someone with good credit, your bad credit mortgage lender will charge you a higher interest rate to cover their investment.
Finding a Bad credit Mortgage Lender with a Low APR
If you're willing to spend the time and effort to shop around for your bad credit mortgage, you could save thousands of pounds. Like any other competitive industry, the mortgage industry tries to find ways to attract new customers with special offers and deals on their products.
When you're looking for a bad credit mortgage lender, look for a "loss leader," meaning that the lender will offer you an initial low fixed rate despite the fact that it's a sub prime or bad credit mortgage. If you are not locked into this mortgage, every couple of years, you may want to consider looking around for a better off with a more competitive rate.
Watch out for early redemption penalties when you're looking around for the best bad credit mortgage deal. There is typically a fee associated with leaving your lender after the introductory period of your mortgage loan. If you do not see any information about early redemption penalties in your mortgage contract, be sure to ask your lender about their early repayment policy and fees.
While sub prime or bad credit mortgages are only available to those with poor credit histories, they are actually able to help you repair your credit over time. If you make all of your payments on time for three years, your credit score will be improved. Once your credit score is repaired, you'll be eligible for a standard mortgage. The interest rate on standard mortgages is almost always lower than the interest rate on bad credit mortgages, so by refinancing and moving your loan to a standard mortgage lender, you will be able to save thousands of pounds in the long run.
Where Can I Find a Bad Credit Mortgage Lender?
Most lenders are able to offer mortgage advice based on your particular financial circumstances. Simply by doing an online search for bad credit mortgage lenders in the UK, you will get pages and pages of results. Although it may seem simple to just do an internet search to find your lender, it's advised that you find a mortgage broker that allows you to search deals from many lenders at one time. By doing this, you will have a much easier time finding the best bad credit mortgage deal for you.
If you don't have time to search through hundreds of bad credit mortgage offers, let SimplyFinance do it for you. Once you provide us with a bit of information, we'll introduce you to a ad credit mortgage broker that will answer any bad credit mortgage questions you may have before they do an extensive search of the bad credit mortgage deals available to find the very best deal for you.