When you have bad credit, it's not easy to get a mortgage. About 25% of people who want a mortgage don't fit the profile of traditional mortgage loan companies. Most of these companies decide whether to give you a mortgage or not based on what they see in your credit file. If you've ever missed loan payments, had CCJs filed against you, or filed for bankruptcy, it will show up in your credit file. This will make it much less likely that a loan company will give you a mortgage.
There is help for people who want a mortgage but are having trouble getting one, or any other kind of credit, for that matter. Specialty mortgage loan providers offer a range of loans for the 25% of applicants who have tried and failed to get a mortgage through traditional lenders. These loans include mortgage loans for people with bad credit and self-certification mortgages, which give people who work for themselves a way to get a mortgage.
The ins and outs of a mortgage arrears loan for people with bad credit
Bad credit mortgage loans, also called adverse mortgage loans or credit repair mortgage loans, are made to help people with bad credit get a mortgage as easily as possible. When deciding whether or not to give you a mortgage, companies that offer bad credit mortgage loans usually look at more than just your credit history. These other requirements vary from provider to provider and from case to case, depending on what caused your bad credit history.
Most mortgage loans for people with bad credit have high interest rates. A variable-rate bad credit mortgage will usually be 2% to 4% higher than the base interest rate, with the worst cases of bad credit getting mortgages at the highest end of the rates scale. Also, applicants will have to pay a bigger down payment than they would for a regular mortgage. Mortgage loan companies that work with people with bad credit rarely give out more than 75% of the property's value in credit.
A bad credit mortgage arrears loan is good if you can deal with these restrictions and the fact that mortgage lenders will only give you a total loan amount that is 2 or 2.5 times your income. You'll not only be able to move up the proverbial "property ladder," but if you make your payments on time, you'll also be well on your way to building a good credit history.
