123 Mortgages Mortgage Guide
Mortgages for people with a bad credit history
About adverse credit
When you apply for a mortgage or any type of financial product your lender will check your credit rating. It's a standard procedure, designed to assess how responsible you've been in the past with your finances. Mortgage lenders need to establish whether or not to take the risk of lending you money.
The mortgage lender will consult one of the two major credit reference agencies - Experian or Equifax. These agencies hold your financial records and your current address details. The process is fairly quick yet very thorough, so there's little chance of being cleared if you do have poor credit history. In fact, even if you live with someone with bad credit history, this may count against you.
In addition to conducting a detailed credit check, prospective lenders will also study your income and outgoings in order to fully assess your financial background.
If your application is rejected by a mortgage lender, for whatever reason, this will also show up on your credit rating, so be very careful about who you apply to.
However, even if you do have a bad credit rating, don't panic! You'll still be able to get a mortgage, although it's likely that you'll have to pay a higher rate of interest. The best person to contact is a mortgage broker who specialises in bad credit, though an IFA or non-specialist mortgage broker will also be able to help.
Adverse Credit Mortgage Agencies
A specialist bad credit mortgage broker is the best person to contact if you do have an adverse rating.
However, be wary about approaching companies advertised in newspapers and magazines - you may be charged to make an application and offered a deal with hidden catches. Always check what you're asked to sign and don't just accept what you're told verbally.
Why you may have a bad credit rating
If you fit into one of the following categories, it may be the reason you have a bad credit rating:
- If you aren't registered on the electoral role, or have changed jobs or houses frequentl within the space of a few years, the credit checking system may misjudge your case
- If you have an unconventional job, credit scoring techniques may judge you as having an unreliable source of income
- If you've had any history of bad credit, regardless of your financial situation now, your overall credit rating will be negative
How to check your credit rating
Simply contact Experian and Equifax for details of your credit records and enclose a cheque or postal order for £2. You can even add an agreed statement to your file if any of the information on your file is wrong or requires explanation.
Contact them at:
Experian, PO Box 8000, Nottingham NG1 5GX
Equifax Europe, Department 1E, PO Box 3001, Glasgow G81 2DT.
Mortgage Basics - basics regarding interest rate, exit penalities, proving income
Property valuation & survey fees - property valuations and expenses incurred buying a home
Getting a Mortgage - different ways you can go about arranging a mortgage
Mortgage Types - explanation of the different types of mortgage available
Mortgages for people with bad credit - info for people who have credit problems
Bad Credit Mortgage - more info on mortgages for bad credit
Remortgaging - information on switching your mortgage to another provider
Mortgage Calculator - basic mortgage repayment calculator
Useful contact information - useful contact information relating to mortgages
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP PAYMENTS ON YOUR MORTGAGE.