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80% Bad Credit Mortgage
Getting a mortgage with bad credit in today's market can seem difficult unless a larger deposit is available. From our experience we have seen that people wanting a mortgage or remortgage with adverse credit will generally get far better results and have more choice with at least an 80% bad credit mortgage and a deposit of 20% or more.
This means the mortgage product would be termed as an 80% LTV (loan to value) bad credit mortgage - which simply means you will be mortgaging 80% of the properties value. On a £200,000 property this would be a mortgage of £160,000 with a deposit of £40,000.
It goes without saying that the larger the deposit available the more choice you will have as the more money (or equity for a remortgage) you put in the less the mortgage lender has to provide which reduces the risk from a lenders point of view as the property will be classed as having equity available from day one.
The majority of people with enough funds to be able to put down at least 20% deposit tend to be those who are moving house and have sold their existing property or re mortgaging and using the existing equity in the property as the deposit for the lender.
80% Bad Credit Mortgage Purchase
For those moving house and using the sale of their existing property to fund the deposit for their new purchase will have slightly more costs associated with the purchase than just the deposit with could reduce the loan to value available as the additional could reduce the deposit available. Their will be solicitor fees and more than likely stamp duty which is paid on the purchase of new properties who's value is over a certain amount.
People re mortgaging for 80% LTV will typically not have stamp duty to pay and will normally find the solicitor fees to be less than that associated with a purchase.
Those with more than 20% deposit available will find even more choice and availability with bad credit mortgage lenders as they tend to be much more competitive and more flexible as the borrowers deposit increases. For example a 75% mortgage (or 25% deposit) will allow more adverse credit and tend to have better terms than a mortgage of 85% as the larger deposit from the borrower reduces the risk to the lender and show the borrower to be in a better financial position than someone with little or no deposit.
If you have at least 20% deposit and want to purchase your next property or remortgage your existing property with a bad credit mortgage then speaking to a specialist adverse credit mortgage broker should save you both time and frustration.
