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10 Key Questions : Bad Credit Mortgage Facts
Part 2
<< Go back to part 1 of our top 10 Bad Credit mortgage facts
Following on our round up of 10 bad credit mortgage facts that you should know we cover numbers 6 through 10 must know facts when applying for a mortgage with adverse credit.
6. Do all sub prime lenders charge for a MIG?
The simple answer is no. A MIG (or Mortgage Indemnity Guarantee) is an insurance paid by the borrower to protect the lender should they have to repossess a property. The insurance will cover the lender for any shortfall on repaying the mortgage if the property is sold (for instance, at auction) for less than the monies secured against it. A MIG may be charged by any mortgage lender whether they are offer bad credit mortgage solutions or not, and just because you require a mortgage with bad credit does not automatically mean a MIG will be charged - some lenders charge a MIG and some do not.
7. Will it cost more to leave a sub prime mortgage lender?
Any mortgage with a special deal period (such as a fixed or discounted interest rate period) will have penalties in place for borrowers who want to 
redeem the mortgage whilst in the special deal period. This is because the lender has reduced the monies they will make on interest payment and to make sure the product they are selling is commercially viable they 'tie' people in until the special deal period has ended.
Once the deal period has ended it should cost no more to leave a specialist lender than it does any other lender, like most lenders they will typically require one months notice or one months interest payment as well as a deeds release fee (in order to transfer the deeds to the new lender) which is typically around the £100 mark.
8. I already have an bad mortgage, can I get a secured loan?
When people apply for a secured loan the secured loan lender will need permission from your existing (1st) mortgage company to place a secured loan behind theirs (hence the term 1st and 2nd mortgage). It makes no difference whether the lender is a sub prime lender or or if your current mortgage is classed as an adverse credit mortgage the secured loan lender will still need to ask the 1st mortgage lender for permission, all lenders will look at your existing mortgage payment history and if the mortgage has been paid on time with no arrears then its likely they will agree, if there are mortgage arrears then the lender will need to look at the situation and the reasoning for the secured loan much closer before they will allow another loan to be secured against the property.
9. Can I use a 'normal' lender after being with an adverse credit lender?
As long as you meet the high street lenders mortgage criteria there's no reason why you can not - the fact that you are already with a sub prime mortgage lender will have no effect on the new lenders decision - as long as you can meet their criteria everything should be fine. Many people with bad credit plan to use a sub prime mortgage lender then go with a high street lender after, this is most used when people are going through a credit repair exercise - they remortgage with an sub prime mortgage lender and clear all their bad debt and a couple of years later when they can change mortgage companies without incurring penalties they move back to a high street lender on a better rate.
10. Do I need a mortgage broker for an adverse credit mortgage application?
Normally yes, you will normally always need to use a mortgage broker to get a bad credit mortgage. This is due to the fact that, in order for the lender to keep costs down for the borrower they do not employ the sales staff to deal with public enquiries. This also means the emphasis is on the mortgage broker to ensure the mortgage is suited to your needs. Specialist bad credit mortgage brokers tend to get the best results for bad credit mortgage applications as they will be more familiar with the lending criteria and more familiar with what deals are going on at the time you want to apply. A specialist broker should also be able to move things along more smoothly as they will have more experience in dealing with sub prime lenders and their underwriting criteria.
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"Adverse Credit Mortgage - 9 Key Questions Answered"
