What are Adverse Credit Mortgages
Adverse credit mortgages are suitable for people who are unable to obtain a mortgage with traditional high street lenders. This may be because you have missed mortgage, loan or credit card repayments or have had defaults or CCJ’s registered against you for example.
This type of mortgage was widely available prior to the credit crunch in 2007. Since 2007, the market for adverse credit mortgages has shrunk dramatically and now there are far fewer lenders operating in this sector of the market.
The lenders still offering adverse credit mortgages require a minimum of a 15% deposit to consider an application and for some schemes the deposit requirement may be as high as 50%.
The degree of adverse credit allowed by the lenders can vary considerably, but we still have access to mortgage options that allow for defaults, County Court Judgements (CCJs), mortgage or loan arrears, bankruptcy or voluntary arrangements (IVA) with creditors.
Having an adverse credit product option means that borrowers who are not able to get a mortgage from a traditional high-street lender may still be able to get the mortgage they need to buy their house.
Adverse credit mortgages generally apply higher interest rates because of the increased risk to the lender, but rates currently start at 3.44%.