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Is it Easy to Get a Home Loan If You Have Poor Credit?
There are a lot of people who will go through credit problems during some time in their life. As a matter of fact, just last year,
mortgages for people with a poor credit history represented more than 14% of all UK mortgages.
This segment grows year after year.
There are many different reasons for recieving a negative credit rating. Often, the person is simply the victim of bad luck. Common circumstances might be Illness, Divorce, Redundancy, Death and Bankruptcy. These situations would cause people to
struggle with their house payments.
The main indicators that you could have a poor credit score are: You've declared bankruptcy. You have at least one court judgment against you. You have entered into debt agreement. You've been in deficiency with a previous mortgage loan.
Until lately, having a negative credit score could severely limit
your liklihood for getting a home loan. There was a possibility that you'd have to go and see an expert mortgage lender and accept a much higher interest rate than ordinary borrowers.
But today, UK Mortgage Lenders have become more sympathetic to people with
bad credit records. They are more interested now recognizing
those that are usually good borrowers but have simply had some bad luck. Numerous standard lenders will now provide home mortgages even with an unperfect credit score.
Within the past several years, the range of "credit repair" and "adverse
credit history" UK mortgage deals from mainstream banks and building societies
has considerably grown. This added competition simply means that mortgage deals they offer to borrowers with bad credit are now even better. You'll find terms that are more welcoming and lower interest rates. The advantages when doing business with these types of lenders (typically building societies) is that they generally offer
you the opportunity to move onto one of their usual best buy mortgage deals after only two or three years - if you've been up to date with your payments.
In fact, people with only marginally adverse credit scores often discover that the interest rates that were offered to them are no more than 1% above the usual
variable interest rate. Sometimes they discover that they qualify for the exact same uk mortgage deals
offered to mainstream borrowers.
For people that have really bad credit, what seems to happen is, the more severe the credit score, the higher the interest rate charged. At the top end of the scale,
recent bankruptcies and other major credit problems might
find rates up to 11%. But these rates do not apply to most, so don't
let that discourage you.
If you have a bad credit record, one thing that can help do is to make steady payments on any financial debt. The mortgage
lenders simply want to see payments that are regular and unbroken. It doesn't matter how much you pay.
It is the regularity they are searching for. In addition to a regular annual income, this
will really help improve your credit score. These two things are the prime ways that those that have excellent credit scores got those scores.
Mainstream borrowers can now expect and anticipate a wide variety of choices in UK homeloans: trackers, variable rate mortgages, fixed mortgages –
the list doesn't stop there. The best news is that most home mortgages are now possible with poor credit rating mortgages. A good share of lenders working with poor credit
situations are now providing similar choices to those available in teh mainstream market. Two year fixed rate mortgages are becoming more popular due to the security they give. Even if rates go up,
payments on a fixed mortgage stay the same.
To locate the best deal on your mortgage, it's worth it to accept some professional advice when
seeking a remortgage or mortgage. Seek advice from a
bad credit mortgage specialist, who can review a wider selection of mortgages for you. Look around to locate the package that fits your needs. As long as you have your finances under control today and you have met with all the legal obligations
regarding your previous debts, you've got a pretty good chance of getting a mortgage or remortgage.
Authors biog:
Brian Harbinson is a regular contributor to MortgageSorter, a UK website specialising in making UK mortgages easy to understand
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