Bad credit mortgagesare aimed at individuals who have a bad credit history. Individuals who have a past record of not repaying their arrears on time can borrow from a bank. This provides them with an option to improve their credit ratings. In these cases, lenders take a significant risk when they lend to people with a bad credit record. Hence, lenders charge more interest for bad credit loans.
There are different types of bad credit mortgages available such as secured mortgages and unsecured mortgages. These forms of bad credit mortgages are used to cover an array of expenses. A secured bad credit mortgage is easily available because collateral has to be provided as security for the loan. Conversely, unsecured bad credit mortgages are very hard to get because it bears a high level of risk for the lenders.
The number of individuals with bad credit is increasing in the UK. With increasing inflation and the cost of living in the UK, people are failing to repay their outstanding amount and therefore going into arrears on their mortgage causing worse credit rating. "The Bank Of England base rate is constantly rising and showing no signs of stopping" as the base rate has been reduced twice in the last few months and is expected to go down even further.
The amount of debt is also very high in the UK and the amount of debt coupled with peoples ever increasing mortgages due to the influx in the housing market mean that individuals to a greater extent are having defaults, missing payments, CCJs etc. and consequently obtaining bad credit records.
Individuals with a bad credit record may find it difficult obtaining a mortgage as a lot of the banks and lenders will not offer finance to people who have unfavourable credit.
Disadvantage of having a bad credit rating
Having bad credit history means that, you are ineligible for the leading rates presented by the principal banks and high street money lenders. You can find many proficient lenders who specialises in arranging mortgages for individuals with a bad credit history. The rate applicable for an individual having a bad credit rating will always be higher than what you could obtain if you had a clean and spotless credit record.
Luckily there are a number of leading lenders who offer bad credit mortgages. Suitable mortgages depend on the value of the property (home). Mortgage lenders assess the repayment abilities of the individuals in different ways. Location in which an individual resides plays a significant part in shaping the credit value of the person.
Individuals having bad credit ratings can improve their credit ratings by paying off their loan in time. One needs to be very diligent, paying all their bills as they fall due in order to avoid a repeat problem. This can facilitate them to perk up their credit record scores.
If you want to get more information on Bad Credit Mortgages, please feel free to get in touch with IF Financial. We offer financial services in all areas of the commercial sector where our experience and financial contacts have proved invaluable in sourcing Commercial Mortgages, Bridging Solutions and Development Finance to clients whatever their credit history...
