Adverse Credit Mortgages Update

With personal debt on the rise, Government cutbacks starting to take effect and the economy only just emerging from recession, it is not uncommon for people to have some ‘adverse’ or ‘bad’ credit history.
The most common causes of ‘adverse credit’ are unpaid debts and late payments of loans or credit cards but causes extend to past mortgage arrears, defaults, CCJs, repossession and bankruptcy. An adverse credit history will make it more difficult to find a mortgage provider but depending on individual circumstances in areas such as income, deposit, the type of bad credit registered & the date of registration, it may still be possible to obtain a mortgage / remortgage.

Generally speaking an adverse credit mortgage will cost you more than a high-street mortgage product because the lender sees it as a higher risk than a ‘normal’ mortgage. Therefore, it is usually recommended to take out a bad credit mortgage for the shortest possible term. You need to use the bad credit mortgage as a credit repair scheme and as soon as you are free from your bad credit history (typically adverse credit entries will drop off your credit file 6 years following initial registration) then it is best to look for another mortgage with lower interest rates.

Those with adverse credit need a mortgage product to suit and even 5 years ago there was a plethora of lenders willing to assist those with a bad credit history. However following the sub-prime crisis in 2007 the majority of these lenders have disappeared and are either no longer lending or have ceased trading themselves. Fast forward to 2011 and there are now a small number of specialist bad credit lenders that are starting to assist borrowers with an adverse credit history but criteria is very specific as to the level of defaults, CCJ’s and arrears that will be allowed.

Specialist lenders still active in the bad credit mortgage market tend not to be high street providers and Mosaic Mortgages can help you find the right lender to suit your individual circumstances. We have in depth knowledge of the bad credit mortgage market and are able to offer advice on the best products on the market. Our aim is to get you back to a high street lender as soon as your credit history allows it.