Finance Credit

How To Get Mortgages Bad Credit


If you have a bad credit record and have probably missed out on a few credit card payments, have had a county court judgment awarded against you or have previously been bankrupt, you might find it very difficult getting a mortgage. This however does not mean that you will not find it because there is what are known as bad credit mortgages for people with a bad credit record. Interest rates for bad credit mortgages are usually higher than the normal mortgages and you might require a larger deposit but it is still possible to find bad credit mortgages and there are alternatives available for you out there.

Step 1

Bad credit mortgages are very vital for people with poor credit rating and they assist you in getting a mortgage. While bad credit mortgages are similar to the usual mortgages, they are provided to people who fail the normal lender credit check. The interest rates charged are higher because anyone who has a poor credit rating is considered to be a higher risk.

You will know if you need bad credit mortgages, if you have been declared bankrupt or have recently had to get into a debt management plan. If you have also missed credit cards, loan or mortgage payments or made late payments, or if you have recently had a county court judgment awarded against you, you will need bad credit mortgages too.

Step 2

Before you make an application for any type of mortgage, you should always ask for your credit report and look t it as this will determine if you need bad credit mortgages or not. If you want to get bad credit mortgages, you will need to have a larger deposit of about 30% or more of the value of your home. There are different types of bad credit mortgages available for you for example fixed bad credit mortgages, variable bad credit mortgages, and discounted rates bad credit mortgages.

Step 3

Before you make an application for any mortgage it is advisable idea to find out what is on your credit reference agency file to determine if you have any credit problems. It is also vital that you should make comparisons on the total costs of various lenders of bad credit mortgages and also find out about their fees and charges. Never make many applications for bad credit mortgages as these searches might affect your credit rating. Use a price comparison site to help you determine what the rates are for different lenders of bad credit mortgages instead of spending lots of time on the phone speaking to many lenders of bad credit mortgages.

Step 4

Once you have determined all of the above, visit credit unions as they will be more willing to offer you bad credit mortgages since they are more open to dealing with the individual as opposed to only looking at a credit score and the loan application. When you discuss with a person instead of just making applications, you are more likely to get bad credit mortgages.

Step 5

You can also find a co-signer with good credit to sign your bad credit mortgages. Their good credit might help you secure bad credit mortgages from reputable financial institutions with a much lower interest rate than you may be able to secure yourself. While securing this kind of bad credit mortgages, you should be aware that if you default, your co-signer might end up getting stuck making repayments on your bad credit mortgages. There are many other lenders who will be willing to give you bad credit mortgages as long as you have a large down payment and will agree to pay the higher charges of interest rates.


How to improve your credit ratings:

1. Make sure you are on the electoral roll. 

2. Pay your bills at the right time and in full.

3. Close any credit account that you do not use. 

4. Always check your credit report to verify that the information is correct. Should you notice any errors, speak to the relevant lender and ask them to correct the errors. 

Sources and Citations

Websites on loans, lending, mortgages and credit cards

By Freelancer Nix, published at 05/11/2012
   Rating: 4/5 (11 votes)
How To Get Mortgages Bad Credit. 4 of 5 based on 11 votes.