Who are Adverse Credit Mortgages suitable for?
Statistics reveal that one in five people in the UK have what is regarded as a poor credit rating. People falling under this category have a wide range of occupations, income levels and ages. It may not be a matter of financial mismanagement but simply unemployment or even being in dispute with a company over payment of a bill.
Individuals with a poor credit rating are seen as non-standard by high street lenders and as a consequence will have difficulty being accepted for a mainstream mortgage product.
There are many reasons why people get turned down for a high-street mortgage. Many people may not realise that one of the most common reasons is paying a bill late.
All credit agreements that you have in place such as mobile phone contracts, credit and store card accounts and even gas and electric bills paid by Direct Debit may appear on your credit file. Just making a late payment on any of these accounts can result in your mortgage application being declined by a high street lender.
Other reasons may be more serious including having a CCJ, IVA or a bankruptcy recorded against you.
An adverse credit mortgage gives people who are classified as non standard the opportunity to buy or remortgage a property and rebuild their credit rating.
Specialist lenders are concerned that you ‘rehabilitate’ and rebuild your credit status but they are also concerned about responsible lending – making sure you can afford the repayments and thereby avoid further debt.