Getting A Mortgage With Adverse Credit

If you have adverse credit, it isn't the end of the world. There are still many mortgage lenders who will lend to you. In fact, there are dozens of lenders and deals, with the numbers increasing all the time. So, how do you go about getting a mortgage if you have adverse credit?

The first thing to do is to get a copy of your credit file. This will obviously cost a little, but it's worth it so that you can check that details of adverse credit are correct. You don't want to be penalised for a debt that is not yours, or one that you have already paid. Once you have made sure that your credit file is accurate, it's time for the next step: finding a mortgage.

It is not difficult to find a mortgage when you have adverse credit. Although most high street lenders are out of the question, there are still plenty of others to choose from. And even some of the high street lenders have specialist lending arms, to cater for applicants with poor credit. Finding an adverse credit mortgage lender is as simple as searching a financial comparison website, or making an appointment with a mortgage broker. In both cases you will get an overview of the deals available, and what you might need to do to qualify for those deals.

If you have been made bankrupt, have had an IVA or CCJs, then in most cases the longer you can wait to make a mortgage application, the better the deal you will get. That's because one of the criteria that adverse credit mortgage lenders use to determine the interest rate you will pay is how far in the past the adverse credit circumstances are. This means that if you satisfied an IVA yesterday (and there are lenders who provide mortgages to people in these circumstances), you will pay a far higher rate than someone who satisfied an IVA one or two years ago.

What Lenders Look For
A key word here is 'satisfied'. When lenders look at your credit file, even adverse credit mortgage lenders, they will be looking to see that you have kept up with whatever payment arrangements you have made. A good payment record is a sign that they can risk lending you money even if you have a poor credit history. Let's face it, if your poor credit record resulted from illness, job loss or relationship breakdown, and things have now changed for the better, it is unlikely that your credit profile will deteriorate further.

Remember that making repeated credit applications that are refused can further damage your credit rating. If you have bad credit, try to find out if you are likely to get the mortgage before making an application. This is one good reason to speak to a broker or financial advisor before applying. You don't have to compromise on the type of mortgage you get, either. You can get offset mortgages, flexible mortgages, buy to let mortgages and other types of mortgages with adverse credit. However, you will pay a premium because of your credit circumstances. This is typically a loading of one to five per cent on the usual mortgage interest rate.