Bad credit mortgages UK were created to oppose the normal system of mortgage approval. In the past, people had steady jobs and houses were affordable for most. This meant it was easy to mortgage them – a job should last 20 years and a house could be paid off in 10 years, so there were no complications. Of course in the last 15 years things have become a lot more complicated: people only stay in jobs for a few years, houses are wholly unaffordable and many people carry debts and arrears from credit cards and loans. So they created bad credit mortgages UK to deal with this – special mortgages catering specialised borrowers.
So a lender of bad credit mortgages UK looks at borrowers with a bit more of an open mind. Regular lenders will still demand the clean credit, the steady income and possibly even some considerable collateral. But a lender of bad credit mortgages UK will take on the risk of someone that has none of those things, because there are still ways to create a mortgage – including higher lending charges, tough penalties and higher rates of interest. But these are manageable with some good advice and many people have had successful bad credit loans.
The problem over the last few months has come about because the risk got too much. Too many lenders with too many risky customers gave out too many bad credit mortgages UK. This meant lots of big lenders, especially American lenders, lost lots of money and as a result stopped lending bad credit mortgages UK quite so freely.
What does this mean to bad credit mortgages UK? In the UK there are millions of people who need a mortgage, but at the same time have debt problems and arrears. Simply, either the sub prime borrowers will not be able to find a mortgage, or more likely they will just have to pay more money. Risk needs to be offset by cost, so the lenders of bad credit mortgages UK have just added more fees, even more strenuous penalties and even higher rates. So bad credit mortgages UK have not disappeared, they have just become a lot less inviting.
The key to finding and managing bad credit mortgages UK, and making sure they still work for those who are not prime borrowers is to talk to an adviser. A mortgage adviser will be able to find you a deal, no matter how uncompetitive the bad credit mortgages UK. Sub prime deals still work; they just take a bit more work from the borrowers.