Bad Credit Mortgage
What is credit history?
Whenever you borrow money or save money using a financial institution such as a bank your credit history is recorded. Credit history details are stored by credit reference agencies such as Equifax and Experian. Lenders use this information to decide whether you are credit worthy, when you apply for a loan. They also use information such as the value of your assets and your occupational salary.
Do you have a bad credit history?
Surprisingly many people in the UK have bad credit histories. If you have ever made late payments on a loan you will probably have a bad credit history. You may also have a bad credit history if you have been involved in a divorce and have been advised by your solicitor to not pay your mortgage repayments until a settlement has been agreed between the divorcees. If you have made a late payment on some insurance, rent or a personal loan you probably have a bad credit history. Also if you have run over the limit on an overdraft, or not paid off your credit card on time it will be taken into account by lenders, when considering your mortgage application. Anything that would make a lender believe that you might cause them hassle with mortgage repayments is taken into account by lenders considering your application. Even someone sharing a house with you, who has a bad credit history, can affect your application.
Find out if you have bad credit at Equifax.
Bad Credit Mortgages
The most important thing to do if you think you have a bad credit history is:
Do not apply for a mortgage if you think you will be rejected.
Every time a mortgage lender rejects you it is recorded by a credit reference agency. The next lender you apply to will take note of your past rejection when considering your application. Fortunately some mortgage brokers specialising in bad credit cases can make sure this is avoided.
There are many lenders who specialise in bad credit mortgages in the UK. If you are unable to get a mortgage through a high street lender the specialists will probably help you. For the added risk they take you will have to pay a higher than average interest rate for a bad credit mortgage.