Mortgages with a bad credit rating
A poor credit record and rating can be a millstone around ones neck for a long time and a serious stumbling block when looking for a mortgage.The current economic crisis has not been an assistance to those with a poor credit rating; lenders who were once willing to lend to those with an adverse credit rating are becoming more difficult to find.
Perseverance is the key. It is by no means impossible for someone with a poor rating to secure a mortgage – there are a few things one can do to help the process.
The first, and most important point to think about when looking for a mortgage is the deposit you are able to put down. Having a poor credit rating can be as a result of circumstances that are long in the past and you may have managed to save a sizeable nest egg with which to apply leverage to the lender.
It is vital to stress just how beneficial this is, as a large deposit may open doors that may remain locked to those with little to offer.
Lenders will be more willing to negotiate with a potential buyer on a sliding scale that measures how much, or little of the capital they are needed to advance – the less the better, especially in the current climate of tightened financial belts.
A further factor to take into account is the lender itself: there are many lenders on the market who specialise in adverse credit mortgages and loans; whilst these companies were once viewed as unscrupulous traders all mortgage lenders must be and are now fully licensed.
With things as they are in the financial market the rates may vary greatly between lender to lender and the buyer with adverse credit and a sizeable deposit is advised strongly to shop around for the best possible deal. It can be surprising just how much one can save. Remember that a small percentage rate difference will lead to increased monthly mortgage repayments. Over the lifespan of the mortgage this can lead to signiificant savings or conversely increased repayments.
The most obvious advice for those who have an adverse credit rating appears to be the most difficult – set about improving your rating. This may not be as difficult as it first seems as if your are in the market for a mortgage, your past problems are clearly behind you. The best way to improve ones credit rating is to make regular payments on any outstanding debts and clear them if at all possible. This results in a mark on your rating that moves you that little bit closer to a better rating.
Of course, this can be time consuming and limiting, but if you can spare some time to work at it, it can be very beneficial in the successful search for a mortgage.
Finding a mortgage with poor credit is not impossible – a quick web search will point you to many specialist lenders in this area. It can lead to a higher than average repayment rate and the necessity for a bigger deposit. Take those pointers into account, and you may find the mortgage you are looking for.
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