What is a Bad Credit Mortgage?
Bad Credit Mortgages (also known as Adverse Mortgages) vary massively from lender to lender. In the main, there are 4 types of adverse:
- Late/Missed payments,
- Defaults/CCJs,
- Debt Management Plans (DMPs),
- IVA/Bankruptcy.
When looking to overcome adverse credit there are 3 very important questions:
- When was the adverse registered?
- What was it for? (Credit cards, Mobile phones, Secured loans etc),
- Has the adverse been cleared?
Once we have the answers to the above we can then start looking at what the options are. Can we go with the high street lenders or are we going to have to look at more specialised options. Not all adverse Mortgages will result in higher rates. One of the benefits of using a broker that specialises in adverse credit such as ourselves is that we know lenders criteria on the adverse front and whether or not it is likely to pass any credit scoring checks and the underwriters checks. Passing the initial credit check is just the first stage and a lot of work goes in to packaging the Mortgage application up in a way that makes it as appealing as possible to the underwriter.