When it comes to buying a home, some lenders can take on a rather sanctimonious attitude. They want to deal only with those who have flawless credit histories, perfect work records and adequate deposits. But money problems can affect everyone. "Adverse credit" refer to a range of credit problems from a late or missed payment to loan defaults, mortgage arrears, County Court Judgements, property repossession and bankruptcy issues.
Sometimes people may get into any of the above problems through no fault of their own and, even if they have been to blame, want to sort things out. Certainly no-one taking out a mortgage wants to see their property repossessed.
However, there is some good news in that some lenders are willing to provide adverse credit mortgages. Deals are unlikely to match standard mortgages; lenders in the adverse credit market - which is also sometimes described as 'sub-prime' or 'non-conforming' - will charge higher rates.
While the lenders clearly want to keep some degree of separation between their standard and adverse credit divisions, the deals they are offering are less punitive than in the past. Most lenders will also cut the interest rate if borrowers keep up a good payment record. And, after three years, it may be possible to switch to a standard loan.
Your application will be thoroughly vetted and the interest set according to the risk the lender believes you pose. You may also be subject to redemption penalties, but these should cease to apply after a set number of years.
A mortgage may not be available in all cases, but we'll always try our best.