The Money Stop

Unfortunately, over recent years we have seen a steep rise in the level of consumer debt in the UK, and as a result of this many people have found themselves struggling to keep up with repayments. This has inevitably led to missed or late repayments, and for many individuals has resulted in a reduced credit score and a tarnished credit history. Your credit rating can have a huge impact on your ability to obtain any form of credit in the future, which includes mortgages, and those with a very bad credit history may experience real difficulties when it comes to getting an affordable mortgage – or any mortgage – from a lender.

Firstly, it is important to remember that there are lenders out there that are able to offer mortgage loans to those with bad credit. However, you will find that some of these companies charge extortionate rates of interest on these loans for bad credit consumers. If you are already struggling with debt taking on a high interest mortgage loan could make a bad situation worse, and could result in you losing your home due to being unable to keep up with repayments.

Of course, there are also lenders out there that can offer more realistic interest rates on bad credit mortgages, although the rates will still be higher than those offered to good credit consumers due to the increased risk to the lender. Shopping around and comparing the different bad credit mortgages available can help you to find a competitive interest rate and a mortgage deal that suits you. However, being in bad credit means that you have already experienced financial difficulties and therefore you should consider whether you can comfortably afford the repayments on a mortgage before you make a commitment.

Some bad credit consumers may find that they are refused a mortgage altogether, but there are steps that could improve your chances of getting a mortgage even with poor credit. A larger deposit could improve your chances of success, and making improvements to your credit rating though sensible and timely repayments on your financial commitments could also help. Also, don’t set your sights too high – look for an affordable property and take out a smaller loan that you can afford the repayments on – this can improve your chances of success and reduce the risk of further financial problems further down the line.

Related Posts

Credit crunch will hit ‘less well off’ worst

Mortgage-seekers who are less well off will be hardest hit by the implications of global credit squeeze.According to a representative for money education charity Credit Action, the sub-prime mortgage crisis that hit the US with

Repayment Vs Interest Only Mortgage

If you are on the lookout for a mortgage to purchase a property in the UK you could find yourself in something of a minefield, with a wide range of mortgages to select from, each

Mortgages - Search Mortgages For A Cheap Quote

What are the main two types of mortgage available in the UK? The two main mortgage types available to consumers in the UK are known as the repayment mortgage (capital and interest mortgage) and the interest

Mortgage holders told credit cards ‘not necessarily a bad thing’

People with mortgages who use credit cards to make sure they meet repayments are not necessarily doing the wrong thing.According to the director of Debt Advice Bureau, Stephen Rose, some people have more or less

Bad credit doesn’t mean bad mortgage

It is something that occupies the minds of many young adults today but a leading mortgage broker claims that bad credit need not mean higher mortgage rates.London and Country (L&C) claims that 71 per cent

Compare Mortgages Online - UK Mortgage Comparison

There are many different types of mortgages available in the UK these days, and in order to find the right mortgage for your needs you need to compare mortgages to see which one best suits

Remortgages

Anyone with a mortgage in the UK will know what a huge financial commitment this is, and it is important to ensure that you have the right mortgage because of the long term nature of

Self-certification mortgages still available despite credit crunch

Self-certification mortgages are still available despite the credit crunch and consequent tightening of lending criteria, according to industry experts. Mortgage advisers Alexander Hall said that the credit crunch has had "nowhere near" the same impact