Trying to buy your own home but can’t get a mortgage because of your bad credit rating? Stop applying for regular mortgages now and start looking at the bad credit mortgage market.
Traditional mortgage providers rarely offer their mortgage products to people with bad credit. Why? Because if you’ve had trouble paying your bills, credit cards or loans in the past, you’re a bad risk. Lending you tens or hundreds of thousands of pounds could be a bad idea.
The recent increase in the number of people in this situation, however, has meant that demand has risen for suitable mortgage products. The larger lenders are still wary of bad credit risks, so it has fallen to more specialist lenders to fill the gap in the market. Consequently, the bad credit mortgage market is growing, and is competitive, which means that customers suffering from poor credit can find a range of mortgage products that suit their needs and that help them get their finances back on track.
So, what is a bad credit mortgage?
A bad credit mortgage is a financial product that’s specifically designed to let you buy your own home even if you have a bad credit rating.
• Interest rates on these mortgages are typically marginally higher than for traditional mortgages. This is because the risk to the lender is higher.
• There may be some additional conditions on your mortgage, which are placed there to give security to the lender. These might include a larger arrangement fee at the start of the mortgage, or stricter redemption penalties.
• These mortgages are usually only made available through specialist mortgage advisors, who, in the UK, must be authorised by the Financial Services Authority (FSA).
• A bad credit mortgage can help you to address your financial difficulties and even to improve your credit rating over the long term.
Getting rejected by lenders for traditional mortgage products is something that gets added to your credit history. Avoid this by speaking to an independent, experienced mortgage advisor who can help you buy your house with a mortgage that’s designed for people in your circumstances.