A sub prime mortgage and an adverse credit mortgage are basically the same thing. Adverse credit mortgages are also known as nonstandard mortgages, credit impaired mortgages, non status mortgages, and bad credit mortgage loans. When you have any examples of debt problems or missed repayments logged on your credit report, you do not meet the traditional criteria for mortgage lending, so you'll have to find a adverse 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 adverse credit mortgage lender will charge you a higher interest rate to cover their investment.
Finding an Adverse Credit Mortgage Lender with a Low APR
If you're willing to spend the time and effort to shop around for your adverse 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 an adverse credit mortgage lender, look for a "loss leader," meaning that the lender will offer you an initial low fixed rate to attract your business 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 one with a more competitive rate.
Watch out for early redemption penalties when you're looking around for the best adverse 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 adverse 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 adverse 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 an Adverse Credit Mortgage Lender?
Most lenders are able to offer mortgage advice based on your particular financial circumstances. Simply by doing an online search for adverse 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 adverse credit mortgage deal for you.
If you don't have time to search through hundreds of adverse credit mortgage offers, let SimplyFinance do it for you. Once you have filled out our short mortgage form, we'll introduce you to a adverse credit mortgage broker from the SimplyFinance network who will carry out an extensive search of the adverse credit mortgage deals available to find the very best deal for you.