All About Bad Credit Mortgages

28-Nov-2007

When you're looking for a new mortgage loan, you need to understand how your credit will affect the interest rate and the type of mortgage you'll be qualified to take out. There are a number of lenders and financial advice websites, like SimplyFinance, that will provide those with bad credit with bad credit mortgage advice.

If you've got a poor credit history and you're looking for a mortgage, the odds are quite high that you'll run into some problem. Instead of finding a standard mortgage through a High Street lender, you will need to apply for a bad credit mortgage, which is also called an adverse credit mortgage or a subprime mortgage. There are many people throughout the UK that have poor credit who need to consider taking a bad credit mortgage loan.

What's the difference between a subprime mortgage and a bad credit remortgage? A subprime 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.What is a bad credit mortgage or a subprime mortgage? When a mortgage is a bad credit or a subprime mortgage, it indicates that you may have a poor credit history, CCJs, or mortgage arrears. Due to this, you do not meet the traditional criteria for mortgage lending. When you've got bad credit, there is a higher risk associated with lending to you, so your lender will charge you a higher interest rate to balance the amount of risk that is associated with lending to you.

Who is eligible for a bad credit mortgage? Anyone who has bad credit, loan or credit defaults, a CCJ (County Court Judgment), rent or mortgage arrears, decrees, bankruptcy, or an IVA would benefit from taking out a bad credit mortgage.

How much can someone borrow with a bad credit mortgage? If you've taken out a bad credit mortgage, there are no lenders that will off you 100% of the value of your property. Bad credit mortgage borrowers can usually expect to be given around 90% of the value of the property, and in rare circumstances, you might be able to borrow up to 95% of your property's value.

How hard is it to get a bad credit mortgage? It may be easier than you think to obtain a bad credit mortgage. There are a number of lenders out there that cater solely to those who need bad credit mortgages. Once you have your mortgage, even though the interest rate will be higher than if you had a standard mortgage, the interest will most likely still be lower than the average interest rate on most credit cards.

Will I always need a subprime mortgage? No, you won't always only be eligible for bad credit or subprime mortgages. If you take out a bad credit mortgage, and if you make all of your payments on time for three years, your credit score will have improved dramatically. Once your credit score is higher,  you may be qualified to refinance your loan with a mainstream mortgage. When you switch from a bad credit mortgage to a standard mortgage, your interest rate will decrease significantly, and in the long run, this will save you thousands of pounds.

Where can I find subprime mortgage or bad credit mortgage advice? Subprime and bad credit mortgage advice can be found right here at SimplyFinance. Take just a moment to fill out our short contact form, and one of our representatives will contact you shortly to introduce you to a bad credit mortgage broker that will help you find the best bad credit mortgage available to you based on your personal credit history and current financial circumstances.