Adverse Mortgage Articles
If you are looking for a mortgage but have a problem with your credit history then an adverse mortgage may be the solution. In this section you will find links to our exclusive articles explaining the facts you need to know about adverse mortgages. What are they, how they work, the best place to find the right deals and what you should watch out for when choosing the right mortgage for you are all covered. However, Let’s start with the basics of an adverse mortgage described in plain English below.
Adverse mortgages can be called many different names, depending on the lender. Within the mortgage trade adverse mortgages are usually referred to as non-conforming or sub-prime mortgages. Adverse mortgages may also be called:
- credit impaired mortgages
- non status mortgages
- bad credit mortgages or
- non standard mortgages
The name is not important – adverse mortgages are all mortgages designed as a product for people with impaired, bad or adverse credit.
Adverse credit simply means that you have a poor credit repayment record, which is why people need adverse mortgages. Put simply, you haven’t been good at repaying debt in the past. This results in an adverse credit record. You may have mortgage arrears or rent arrears, or County Court Judgements (CCJs) entered against you. You may even have entered into an Individual Voluntary Arrangement (IVA) or have been bankrupt in the past. All of these things will mean you have an adverse credit rating and may lead to the need for adverse mortgages.
The fact that you have adverse credit does not mean that you cannot get a mortgage, however. There are a growing number of lenders who specialise in mortgage lending to people with adverse credit. These mortgages are called adverse mortgages. You need to realise that your mortgage options may be more limited than if you have a great credit score, and that interest rates my be higher if you have a bad credit rating, but adverse mortgages are available.
It is worth mentioning that if you are self employed, you may also be classed as an adverse credit borrower, and may need adverse mortgages. In the current market mortgages for the self employed are still available even with a blemished credit file. Just because you are self employed mortgages could still be available as long as you meet the lenders criteria on the adverse credit and the self employment conditions.
Obviously, the worse your debt or adverse credit history, the fewer mortgage providers will be open to you. Therefore it is a good idea to check and amend your credit record if possible, and also to repay any small debts that you can before applying. This will widen the range of available adverse mortgages. You can also obtain a more favourable rate by having a larger down payment, or by borrowing less than the maximum you can potentially borrow.
The good news is that by making regular and timely repayments to adverse mortgages, you can over time repair your credit history and restore your good credit. If you make your repayments on time, they will count towards your credit history as a positive, and slowly you will become more creditworthy.