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Adverse Credit Mortgages

With personal debt on the rise, Government cutbacks still taking effect and the economy stuttering post-Brexit, it is commonplace for mortgage applicants to have some ‘adverse’ or ‘bad’ credit history.

The most common causes of ‘adverse credit’ are unpaid debts or late payments of loans or credit cards but this can extend to mortgage arrears, defaults, CCJs, repossession and even bankruptcy.  An adverse credit history will make it more difficult to find a mortgage provider but depending on individual circumstances and an assessment of income, deposit, the type of bad credit registered & date of registration, it may still be possible to obtain a mortgage / remortgage.

Generally speaking an adverse credit mortgage will cost more than a high-street mortgage product because the lender sees it as a higher risk. An applicant will need to use an adverse credit mortgage as a credit repair scheme and as soon as you are free from your adverse credit history (typically adverse credit entries will drop off your credit file 6 years following initial registration) then it is best to consider another mortgage with lower interest rates.

Those with adverse credit need a mortgage product to suit their particular circumstances and pre-credit crunch there were a plethora of lenders willing to assist those with an adverse credit history. However, in the aftermath of the sub-prime crisis of 2007 the majority of these lenders disappeared.

Moving to present day and with the UK experiencing a ‘cost of living’ crisis, it is forecast that arrears will rise and more people will no doubt experience some form of adverse credit. This specialist area of the mortgage market is tipped to grow and although the number of adverse credit mortgage products available is nothing like pre-credit crunch, the adverse credit mortgage market is starting to expand again. However, lending criteria is very specific as to the level of defaults, CCJ’s and arrears that will be allowed. It is now also possible to consider a discharged bankruptcy & IVA’s.

Specialist lenders still active in the adverse 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 adverse credit mortgage market and are able to offer the most appropriate scheme based on your circumstances and needs. Our aim is to get you back to a high street lender as soon as your credit history allows it.

Check your credit history

We recommend obtaining a copy of your credit file and ‘Check My File’ is the most comprehensive as it extracts your credit data from numerous credit reference agencies in one report, We can review the file with you to explain exactly what the various entries mean. Check My File is offered free for 30 days and then £14.99 per month thereafter and can be cancelled at any time. If you are thinking of applying for a mortgage then we recommend taking advantage of this service so that you can see exactly what a lender will see when you apply for a mortgage and they credit search you.

We will provide you with advice of how to improve your credit rating so that we can get you a High Street mortgage as soon as possible.

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Mosaic Mortgages may receive a commission for leads introduced to Checkmyfile.