When getting a loan it is important to understand the adverse credit mortgage rate. The adverse credit mortgage rate will directly determine what you have to repay for your bad credit mortgage repair loan, so you need to know what the different rates are and how the rate you will pay will be calculated.
The first thing to know about the adverse credit mortgage rate you will pay is that your level of adverse credit will directly affect it. Most of the mortgage bad credit refinance deals show a number of rates and it can be difficult to work out which adverse credit mortgage rate applies to your particular situation. Here’s how it works.
As far as lenders are concerned, especially when it comes to adverse credit, the adverse credit mortgage rate is determined by two factors – the amount of adverse credit you have and the loan to value you require. In essence, the adverse credit mortgage rate will be more favourable if the loan to value is lower. So someone who wants a 75 per cent loan to value ratio will get a better adverse credit mortgage rate than someone who wants a loan to value of 85 per cent or more.
Adverse Credit Circumstances
The other factor that affects the adverse credit mortgage rate is more complex, because of the range of different adverse credit circumstances that exist. Some people may have been late paying a couple of credit card bills a year ago. This will show on their credit report. Someone else might be in arrears on the rent or mortgage. Other people might have had County Court Judgements issued against them and still others might have been subject to individual voluntary arrangements or bankruptcy orders. All of these will affect the credit report and the adverse credit mortgage rate you are offered, but there’s still more to it.
Another factor which influences lenders who are offering an adverse credit mortgage rate is time. In other words, if your arrears are some time in the past, if your bankruptcy or IVA has been satisfied for more than a year, then there will be a different adverse credit mortgage rate to someone whose bankruptcy order has only been satisfied for a day. And the adverse credit mortgage rate will also be affected by the value of the CCJs. Someone with £500 worth of CCJs will get a better adverse credit mortgage rate than someone with more than £5,000 worth of CCJs.
All of these factors influence the adverse credit mortgage rate and this is one reason why these rates are often presented in a table, so you can pick out your circumstances and find the rate that applies. This ready reckoner makes it easier to find the applicable rate. The other factor to consider is the loading. You will normally pay a couple of percentage points over the standard variable rate for an adverse credit mortgage, sometimes as much as five. All of this affects the adverse credit mortgage rate you finally get.