Why Do I Need A Bad Credit Mortgage?
Bad credit mortgages are much easier to obtain than they used to be. But just how easy? This rather depends on why you actually have the bad credit in the first place.So what are the reasons why someone might need a bad credit mortgage?
• In some cases, you could have problems with your credit rating through no fault of your own. For instance if you have just moved house, a previous occupant at that address could have had poor credit. It has also been known for people who shop around for the best deal to be penalised. Every time a credit search is done, it shows up on your credit record, and if you then don’t take up the offer, it is assumed you have been turned down! If you are rejected and you are sure you have never defaulted, ask to see your credit record and get it corrected.
• Again, it has been known for quite well-off people who are self-employed to show up badly in a credit search, simply because they don’t have a 9-5 job! This shouldn’t cause too many problems in getting a mortgage, but you need to provide proof of your income.
• Lenders get twitchy if you’ve fallen into arrears on a previous mortgage. It makes you seem like a less good risk. You may still be able to get a standard mortgage, not necessarily a “bad credit mortgage”, but you may be excluded from the best deals.
• One thing that is looked at quite seriously is a county court judgment (CCJ) against you. You get this if you default on a repayment or debt to the extent that the creditor has to take you to court and an order is made against you. If you then don’t pay the money within one month, it will be recorded as a CCJ against you and stay on your record for at least six years. This will seriously affect your credit rating and you will almost certainly have to settle for a “bad credit mortgage”.
• Bankruptcy – some people opt for this when they realise that they can’t pay their debts. It can be tempting as it seems to be a way of making a new start with a clean slate. However you could have your house and many of your belongings repossessed in order to make partial payment to your creditors. As you would expect, it has a very serious effect on your credit rating and you may not even be allowed a credit card for several years. You would certainly have to settle for a “bad credit mortgage” if you could get one at all.
The best way to start is by talking to an independent mortgage broker. Be honest about your past problems and the broker will be able to advise you whether you need a bad credit mortgage and how to proceed.
By: SeanH-9584
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