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Adverse Credit Mortgage Facts
10 Key Questions
There are number of places you can find information about bad credit mortgages and tips on how to help you apply for a mortgage with bad credit.
This is meant as a no nonsense, quick reference guide and includes what we
consider to be the most useful questions and answers relating to bad credit mortgage applications. If your have a question you want answering and can not see it in the ones below, please view the other pages on the site or contact us using the form to the right.
in no particular order...
1. Can an adverse credit mortgage application guarantee I can get a mortgage?
A bad credit mortgage will allow people to apply for mortgages and remortgages with adverse or bad credit being listed on their credit file. Like normal mortgage's they still have set criteria to meet and different adverse credit mortgage products will allow different bad credit to be allowed. They can not guarantee a mortgage for everyone with impaired credit but they do make getting a mortgage with impaired credit much more accessible, if youhave bad credit its probably best to speak to a mortgage company that specialises in adverse credit mortgages.
2. Do all adverse mortgage applications have lenders fees?
A typical mortgage, adverse credit or not will usually have a lenders arrangement fee. Mortgages that allow bad credit may have larger lender arrangement fees than a standard mortgage but that's not always the case. Standard lenders arrangements fees have increased in recent years and nowadays there is little difference between the lender arrangement fees charged between a normal and sub prime lender.
3. Do sub prime lenders have higher interest rates?
A sub prime mortgage lender will typically have a higher interest rate than a standard high street bank or building society lender. The reason for this is simply to reflect the greater risk for the sub prime lender when lending to impaired credit clients. There is also a difference is how the rate is calculated, a sub prime mortgage lenders will typically use the LIBOR rate (London Inter-Bank Offered Rate) as a base for interest rates which is different to the Bank of England base rate that most high street lenders use.
4. Will an adverse credit mortgage application take long to complete?
Not necessarily. Any lender will give a list of documentation and information they require in order issue a mortgage offer, such as ID, proof of residence, wage slips etc - the information a sub prime mortgage lender asks for may be more in depth than a normal lender but if they receive the information in a timely manner there's no reason why an offer can not be issued just as quickly as a normal high street mortgage.
5. Will an adverse mortgage application damage my credit?
When people apply for a mortgage, whether it be from a high street lender or a specialist sub prime or adverse credit lender they will do a credit search. Your credit file will show that a mortgage lender applied for the search for a mortgage application - the credit file will not show which company requested the search.
With that in mind applying for a mortgage with an adverse lender will be no more harmful to your credit file than applying anywhere else. Obviously applying to numerous places can have an effect on a lenders credit scoring procedures but for people with adverse credit its likely this will have little or no effect on any mortgages they will qualify for as the adverse credit listed on their credit file will effect the application more than any searches registered by lenders regarding applications.
The original source article for
"Adverse Credit Mortgage - 9 Key Questions Answered"
