Adverse Mortgages
Year after year there are more and more people needing adverse mortgages. More people are in trouble with either their adverse mortgage or other credit arrangement that puts them in a position that stops the high street lenders wanting to offer them a mortgage due to their credit rating and their risk to lend to.
A few years ago, if you cold not get an adverse mortgage with a high street lender then you would either have to stay on your existing deal, sometimes meaning that you would be stuck on the standard variable rate if your a homeowner already, or if you are a first time buyer or a purchaser, then you would just be decline a mortgage altogether with no other options.
Adverse Mortgage
Nowadays with the increase in demand for adverse mortgages there are specialist lenders who will lend to people with adverse, or poor credit ratings, these lenders are usually finance houses that are a subsidiary of a large lender, for example “UCB Home loans” is the subsidiary of Nationwide building society, and “Mortgages PLC” is part of Merrill Lynch, the private investment company. These lenders are more commonly known as sub prime lenders, and there products are known as sub prime mortgages or adverse mortgages.
Other people that may need to apply for a sub prime mortgage due to being a potential high risk client are self employed people with no accounts or people who do not have payslip’s when employed, or in general if you do not have any proof of income for whatever reason. Sub prime lenders are sometimes happy to lend to people no matter what there credit arrangements or their income, even with no proof at all, however the rates can be as high at 10% or higher on some occasions.
Adverse Credit Mortgage Lenders
Now that there are more and more sub prime lenders in the market even they are having to compete to get business, so it is possible for someone with a poor credit history or with no proof of income to only be paying a slightly higher rate than a person with a high street lender with a perfect credit rating and proof of income, read more »
Although adverse mortgages are high risk, you are still able to borrow up to 95% of your properties value. Although you may be charged a higher lending charge or a mortgage indemnity guarantee (MIG) fee. This is usually added onto the balance of your adverse mortgage at draw down so you will not only have to pay for the higher lending charge, but also the interest that is paid on that too. You do have the option of paying the higher lending charge up front on most adverse mortgages however it can be quite a lot of money to find, usually about 3% of the mortgage amount.
Adverse Credit Mortgage Information
When looking for an adverse mortgage it is probably best to use an adverse mortgage broker rather than tying to arrange the product yourself as most mortgage brokers have experience in the adverse mortgage market, and will know by looking at your credit report who the best adverse mortgage lender would be based on your personal circumstances.
Advanced Finance Limited are an experienced adverse mortgage broker and have access to most of the sub prime lenders on the market.
If you would like Advanced FInance to help arrange an adverse mortgage for you then simply complete the application form at the top of this page, or alternatively you can call one of our experienced adverse mortgage brokers to see what we can do for you.