Adverse Credit Mortgage In The UK

Adverse Credit Mortgage In The UK | Latest Market Guide

The Council Of Mortgage Lenders (CML) has been looking into the adverse credit mortgage in the UK and has recently published some research in the area*. The report on the adverse credit mortgage in the UK covers a range of areas, including definitions of adverse credit which differ from lender to lender, and market estimates. There are also other interesting findings relating to the adverse credit mortgage in the UK.

Some of the research on the adverse credit mortgage in the UK centres on the proportion of mortgages with adverse credit history. The figures show that 60 per cent of adverse credit mortgages fall into the low adverse category, with only arrears of between three and six monthly payments, and County Court Judgements for less than £2,000. The research on the adverse credit mortgage in the UK shows that 30 per cent are in the high adverse category, with bankruptcy or an individual voluntary arrangement (IVA), CCJs over £5,000 and arrears of more than a year. A further 10 per cent are in the medium adverse category, with arrears of between 6 and 12 months and CCJs of between £2,000 and £5,000.

When it comes to the adverse credit mortgage in the UK, the CML research suggests that four fifths of these mortgages are sold through intermediaries who can direct customers to prime or sub prime products as needed. In addition, many consumers can use the adverse credit mortgage in the UK for credit repair, as this type of mortgage is offered by several intermediaries and mortgage brokers. With this type of mortgage, a good payment record over a few years may allow borrowers to move to a product with better rates.

Mortgages For Bad Credit

One feature of the adverse credit mortgage in the UK is that consumers have access to a wide range of bad debt loan mortgage products, including those for buy to let and other specialist areas. In addition, the sector includes products similar to those available to prime borrowers, such as flexible mortgages. Flexible mortgages allow borrowers to overpay, underpay and take payment holidays and this is available with the adverse credit mortgage in the UK. Underpayments and payment holidays could increase the mortgage term and/or the total amount payable.

That doesn't sound like bad news. However, lenders charge in other ways that mean that an bad credit history mortgage is now more costly than it was six months ago. Research from a leading financial comparison site has detected that fees for this type of mortgage have been creeping up. The average fee payable on an bad credit history mortgage was £813 six months ago, but now it is £923. That's a 13.5 per cent increase within the six month period**.

The market for the adverse credit mortgage in the UK is huge, with about 30 lenders and more than 2,500 bad credit mortgage and remortgage deals. And it is likely to get even bigger, predicts the CML. This is because of rising interest rates (the Bank of England base rate has risen by 0.75 per cent in the last six months) as well as the growing number of people opting for bankruptcies and individual voluntary arrangements. It seems that the adverse credit mortgage in the UK is here to stay.

*Source: www.cml.org.uk April 2007 **Source: www.moneysupermarket.com April 2007.

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