Adverse Credit Mortgages - Cheap Mortgage Deals

There are varying degrees of poor credit/adverse and the sub prime market now reflects this. Non-conforming - sub prime - adverse credit, impaired credit and bad credit, are all terms variously used to describe the applicant who will not be able to successfully apply for a standard mortgage product.

The adverse mortgage product is devised to help applicants with a poor credit history buy their own property. This is the mortgage product you would be looking at if you have previously incurred mortgage or loan arrears, perhaps had a credit court judgements (CCJ) or been declared bankrupt.

If you fall into any of the above categories you will be considered a greater risk to any potential lenders and they will adjust their lending terms accordingly. This usually means that the rate of interest will not be as competitive as those for a standard mortgage product.

Rates will, however, differ if, for example, you fall into the 'light adverse' credit range and your product will reflect this. With the increase in competition for these mortgages, the lenders are now offering rates which are slowly edging towards the more standard interest rate. You will however, need to put down a larger slice of the equity through the deposit which may be as high as 35%.

Your case will probably be assessed by a specialist underwriter who will be looking at your ability to afford the repayments in the future. They will look at the reasons for your poor credit past and take these into account. To be assessed you will need to provide full details of your finances as well as any existing commitments and proof of income.

You do not need to have CCJs to be considered as an adverse or poor credit applicant. The reasons for exemption for a standard product can include:

  • Incomplete work or income history
  • Late payment history
  • Non appearance on the electoral roll
  • Living abroad with no credit trail in the UK

Some lenders will offer 'credit repair' mortgages that will help you improve your credit status and also reward regular payments.