Your Guide: Adverse Credit Mortgages

Your first mortgage journey should be an exciting one, but without the right guidance can be scary and stressful, don’t worry! We’ve created this helpful guide to support your purchase. 

 

If you’re unsure what you’re looking for, talk to one of our specialists.

Feel free to contact us and chat through your requirements.

Speak to an expert about your circumstances and lending needs.

Mortgages for adverse credit

Adverse credit mortgage loans are not as freely available as they were, but things have started to improve. 

The thing to remember is that each lender is different and just because you may have been declined by one, doesn’t mean you won’t be accepted by another.

Our specialist advisers have arranged mortgages for people with poor credit in the following circumstances:

  • No credit history

  • Low credit score

  • Late payments

  • Missed mortgage payments

  • Defaults

  • CCJ’s

  • IVA’s

  • Debt management Schemes

  • Repossessions

  • Bankruptcy

  • Payday Loans

  • and customers with multiple credit problems

Adverse credit history mortgages usually (with the exception to bankruptcy as you may also appear on the hunters register) relate directly to what is showing on your credit file.

It may shock you to hear, but different lenders use different credit reference agencies. They may share their records to make sure their information is accurate, but often this doesn’t happen.

This can lead to a situation, where one lender using Experian may decline you for a default that another lender using Equifax or Call Credit might not see.

Most Suitable adverse credit rating mortgages

To get the right rate you need to find all the lenders most likely to approve your circumstances. To do this, you need to know what you’re doing, and for the most part, be able to navigate a landscape can be complex.

Simply make an enquiry and one of the specialists will be in touch to match you with the most suitable deal possible.

Adverse credit mortgage lenders

There’s currently various mortgage lenders for applicants with adverse credit history, and as the industry evolves and wider economy develops, the number of poor credit mortgage lenders continues to increase.

One of the main issues with the industry is that there’s hundreds of thousands of potential borrowers who ARE creditworthy, but don’t know they are. They either sit on a high mortgage rate thinking they are unable to refinance due to their adverse credit, or they have deposit to buy but have been told they aren’t eligible.

Adverse credit remortgage lenders

Remortgaging with adverse credit can be far simpler than for a purchase, namely because you have 2 options: either a full remortgage of your debt, or taking a secured loan/second charge* mortgage, which can be even more flexible in terms of criteria, balanced by potentially having higher rates and costs.

Often if you are declined for a main mortgage but need to raise capital for consolidating debt, home improvements, or any other legal purpose, there may well be a second charge mortgage lender offering a secured adverse credit loan who’ll accept you.

They tend to have a higher tolerance for adverse credit issues, and most notably, affordability.

* Secured loans are available by referral to a master broker only

 

Whatever your background or circumstances, Create the financial future you deserve.

Feel free to contact us and chat through your requirements.

Speak to an expert about your circumstances and lending needs.

Are there any adverse credit mortgages with guaranteed approval?

As with anything in the mortgage world, sadly nothing lenders claim to offer is guaranteed.

There are however, lenders who accept a huge and severe range of credit issues that often stems far past what most borrowers believe to be possible.

 

This includes defaults and arrears as recent as last month borrowing up to high loan to values, right through to previous repossessions or bankruptcies a year ago, with discharge of 3 years previous being able to borrow up to high loan to values.

Bear in mind that mortgage approval comes in 2 stages: an initial agreement in principle (AIP) and a full application approval. Once the initial application is submitted, the underwriter will still need to sign off your application with a full assessment of your documentation and reasons for the credit issues, to establish if you’re likely to be at risk of defaulting in future.

For this reason, it’s important to not view an AIP as a guarantee, and to wait until the mortgage has been underwritten and signed off in full.

The most suitable way to seek approval with an adverse credit mortgage lender is to have a specialist review your credit files (all of them) and match you with the right lender who’ll accept the issues on record.

Before even approaching the lender formally, the specialist can establish your exact situation, and then discuss the case with the lender directly to get a verbal acceptance before proceeding. This way, when the case passes the AIP stage you can be far more confident in the decision, as the likelihood of it going through at full application stage is much higher.

High street lenders adverse credit customers

Contrary to popular belief, it is sometimes possible for high street mortgage lenders to accept adverse credit applications, but only in the right circumstances when applied for in the right way.

Many high-street lenders will never accept your application if issues are severe enough (such as bankruptcy / repossession), however if such issues are historical enough some can be more flexible.

Typically, any issues will need to have fallen off your credit file to fit with these lenders, but it is sometimes possible for a specialist to present the back-story and justification of issues to a lender in the right way, so if they have an appetite to lend they may consider going outside their usual policy by exception.

This is far more likely if your case is strong in all other areas, for example you aren’t borrowing a large amount compared to your income, and you have a large deposit (65% loan to value or less is often the tipping point).

Specialist adverse credit mortgage lenders

“Specialist” is the more acceptable way of saying “sub-prime” which is the old word for a borrower who doesn’t fit mainstream criteria. Historically this mean people with severe adverse credit.

If you are looking to find subprime mortgage lenders for adverse credit borrowers, then these are the same as specialist adverse credit mortgage lenders.

As lending in the high-street continues to move toward the more mainstream “vanilla” borrower (someone with no history of credit issues and very straightforward and stable income, with large deposit), more and more customers fall outside this remit and are considered “niche” or “specialist”.

 

This has seen increased demand for specialist advice, and increased competition by lenders in these markets, hence the fantastic rates now available.

 

Think carefully before securing debt against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

 

 

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