Bad Credit Mortgages...

Many people these days have a bad credit mortgage rating, often due to circumstances beyond their own control.

You may need a bad credit mortgage (also known as impaired credit mortgages, or subprime mortgages) if you have been declared bankrupt in the past, have fallen into arrears on a mortgage or suffered other debt problems. Or you may simply have a CCJ (County Court Judgement) against your name, due to non-payment of a utility bill, for example, which may necessitate a bad credit mortgage when you come to buy a property.

Mortgage Lenders for Bad Credit

Fortunately, it is easy to find a mortgage lender for bad credit these days. Whereas in the past just a handful of specialist bad credit mortgage lenders catered for this section of the market, now every bank and building society has a division specialising in bad credit mortgages and bad credit remortgages (also known as non-conforming or credit-averse mortgages).

The downside is that you may have to pay a slightly higher interest rate than you would otherwise be charged for a regular mortgage. But the good news is that a full range of fixed, capped, discounts, trackers and flexible bad credit mortgages and bad credit remortgages should be available to you.

As there is a wide range of bad credit mortgage lenders available, it is more important than ever to shop around for a deal and a rate that suits you. Therefore it can also make sense to consult a bad credit mortgage broker: they will have access to all of the bad credit mortgage deals available on the market, many of which may not be available direct to the public.

An estimated one in four Britons would be turned down by a mainstream mortgage lender (Source: Mortgage Solutions 12th July 2004. This is because not everyone fits the standard criteria lenders apply. But don't worry if you have been refused credit by a mortgage lender - help is at hand.

These days there are dozens of sub prime mortgage lenders (or bad credit mortgage lenders), who cater for individual cases. Some of them are standalone, others are owned by mainstream banks and building societies. All of them offer sub prime mortgage alternatives for those bad credit mortgage borrowers who may not fit the standard mould. Bad credit mortgage lenders can give financial help to a range of different borrower types.

Bankruptcy and Mortgage Arrears

If you have a bad credit rating, if your requirements are out of the ordinary or if you are self-employed you may fall into this category. You may have a bad credit rating if you have experienced bankruptcy or mortgage arrears in the past. But you may also have a bad credit rating if you have never had a bank account or if you have lived at lots of different addresses, or simply have a County Court Judgement (CCJ).

Bad credit mortgage lenders offer a wide range of deals to bad credit mortgage borrowers - but be aware that the interest rates charged on bad credit mortgages will be somewhat higher than standard rates.

But once you have been with a sub prime lender for three years, as long as you keep up your mortgage payments you will have established a new credit rating and can return to the mainstream market with a new deal at a lower rate. Non-standard sub prime borrowers may also be referred to as 'sub-prime', 'complex prime' and 'credit impaired'.

Pros and Cons of Bad Credit Mortgages

• Bad credit mortgages allow thousands of people access to home loans they might otherwise not get.
• Increased competition means the interest rates charged have come down considerably in recent years.
• A full range of mortgage types is available.
• They are still more expensive than mainstream mortgages and will remain so.
• You can only get a bad credit mortgage via a mortgage broker.