The situation for those with bad credit mortgages

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The situation for those with bad credit mortgages

23rd April 2011

The number of people who have bad credit has rocketed, and it has been difficult for many consumers to adapt to their new rating. After all, the demand for mortgages amongst those with a turbulent financial history is still there. To cater to this, many lenders and mortgage brokers are beginning to offer deals which are aimed directly at those who might have a poor credit record.

Just because the market has become more accessible over the years doesn’t necessarily make the entire process of getting a bad credit mortgage easy, however. Because of the thorough yet quick scrutiny of credit records that all lenders make, it can be essential to be relatively confident that you will be accepted before you submit a query. Your credit record can be made worse by queries for mortgages which are declined by a lender, as it sends a bad signal to other lenders. One declination usually makes other mortgage providers believe that there is a reason for your application to be rejected, and so they will not have as large an interest in pursuing your custom. Remember: bad credit mortgages are as much of a risk for the lender as they are for you. Because of how the recession was caused by lenders giving mortgages to consumers who couldn’t afford to repay the money they borrowed back, there was an excess of toxic assets in the sector which made the financial world a difficult and uncertain place. As many lenders proceed to lick their wounds and overcome the challenging period which they have just gone through, the amount of lending which is being conducted is low, and progressively getting larger as confidence builds. In order to reduce the risk in making your credit rating perpetually worse, it can be a good idea to be referred to an independent mortgage broker. Because of how such brokers have a strong and thorough knowledge of the industry and the mortgages which would be ideal for your situation, you can ensure you get a multitude of quotes without jeopardising your financial position. Just like anything else, it is vital for you to shop around to get the best mortgage deal – after all, settling for the first offer you receive could result in you paying thousands of pounds more than you might have needed to. Another challenge in many respects can be remortgaging. If you originally had a mortgage but your credit rating has changed substantially since the last time you selected a deal, you can find that you might need to look around to find an arrangement which will reduce the monthly repayments you are making. Credit reports can be made worse by missing payments or being late for them, and so it can be fantastic to have a mortgage which is made more manageable – reducing the chances of your finances going out of control. The Internet is a great resource where you can get advice and make an executive decision on what you need to do, so make sure that you use it as much as possible.

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