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Adverse Credit Mortgages

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What is Adverse Credit?

‘Adverse credit’ is an alternative term for ‘bad credit’, a widely-used phrase referring to events, actions or items on someone’s financial history or credit record. Generally indicating something that has had a negative impact on an individual’s credit score, it is used to define County Court Judgements (CCJs), bankruptcies, repossessions, default notices, late payments and other adverse credit events that may appear.

If you have any adverse credit events on your credit reports, then you are likely to find it more difficult to obtain loans or mortgages, and if you do, then it is likely to be at a higher interest rate than if you had applied with a healthy credit history. In this section, we’ll discuss what it will mean to you and how we can help to secure a mortgage with adverse credit.

Adverse Credit Mortgages

Adverse credit mortgages are home loans supplied by specialist lenders, designed to meet the needs of people who want to buy a home but are ineligible for a mortgage with the mainstream high street lenders due to a history of bad credit, or perhaps a single severe adverse credit event.

Your options when it comes to which lenders to deal with, and the rates they will charge you, will be determined by the level and type of adverse credit on your record, and the amount of money you want to borrow in proportion to the value of the property in question – also known as the loan-to-value (LTV) ratio.

As these products can be quite complex, and require a greater level of assessment and negotiation, borrowers will often get help from a specialist adverse credit mortgage broker. He or she will use their intricate knowledge of the UK mortgage lending market to quickly identify which lender and package will best suit the borrower’s situation, or, if a suitable deal isn’t possible at that point, will be able to help them with a plan of action to get them into a far stronger position with their credit score in the future.

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Can I get a Mortgage with Adverse Credit?

If you have one or more Adverse Credit events in your financial history, then your options with some lenders might be limited, but is certainly not the end of the road for your hopes of getting a mortgage.

With all Adverse Credit issues, much will depend on the specifics of the adverse event itself, as well as the borrower’s current financial situation and recent credit history. While many high street lenders steer clear of anyone with even the slightest black mark on their file, and others may accept only those with mild adverse credit items, there are specialist lenders in the UK mortgage market who cater specifically to the needs of people with adverse credit events on their reports, in order to help them own their home. These events can include, but are not limited to: CCJs (County Court Judgements), Late or Missed Payments, Defaults, IVAs (Individual Voluntary Arrangements), Repossessions and Bankruptcy.

Adverse Credit Mortgage Rates

Mortgage interest rates available to applicants with adverse credit events on their financial records will vary quite a bit from case to case – there is no one standard best-rate that can appear on any tables or promotions.

This is because every case is considered individually. Your broker will canvass lenders who may be able to help you, but will first talk to you openly about your circumstances – looking at your past credit history as well as your current situation to get the whole picture on your borrowing, and how you manage your financial affairs right now. Every detail can make a difference, especially the reasons behind your adverse credit event, and what you might have done since to rebuild your credit score.

There are lenders who will consider applications with a range of adverse credit issues, but interest rates will typically be higher than those provided by mainstream lenders. Having a detailed consultation and review of your credit report with one of our experienced advisers will reveal where your problems really lie and what you can do to solve them, as well which lenders could be willing to lend to you, and at what rates.

Adverse Credit Mortgage Lenders

This is a general term that encompasses all ‘specialist’ mortgage lenders who help people with adverse credit events on their financial records to own their own home. Your credit report could include one or more adverse credit events for a variety of reasons – not all of them your own fault – but it does not necessarily mean you will not be able to get a mortgage.

Mainstream or high street lenders will usually not want or be able to help you if you have anything more than the mildest of bad credit events on your files, or if those events were many years ago. Adverse Credit Mortgage providers take a more pragmatic approach when it comes to assessing applicants, whatever their credit rating. They understand the technicalities of bad credit events, and that people can make changes, take steps to improve their borrowing record and move on.

You best option when trying to find a mortgage from a specialist lender, with the kind of acceptance criteria and deals that you won’t find on the high street, is to go over your situation with an experienced adverse credit mortgage broker. They will know exactly who to deal with, and the kind of conditions you will be able to get.

The in-house team at The Mortgage Centres includes specialists in Adverse Credit Mortgages, Loans with Bad Credit, Remortgaging with Adverse Credit and more. Contact us today for a free initial consultation.

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