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Home » Services » Mortgage Services » Adverse Credit Mortgages » Adverse Credit FAQs

Adverse Credit FAQs

Ciarán Power

Last Updated: February 2nd, 2024 at 6:36 pm

Table Of Contents

Introduction

Understanding mortgages when dealing with adverse credit can often lead to many questions. This FAQ section is designed to shed light on the most common queries, offering clear, insightful answers for those navigating the challenges of adverse credit in the context of mortgages. Our goal is to simplify this complex topic and provide valuable guidance.

The Basics

What is adverse credit?

Adverse credit, also known as poor credit, is characterised by a history of financial difficulties reflected in your credit report. This includes missed payments, defaults, County Court Judgements (CCJs), Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs), and instances of bankruptcy.

How does adverse credit impact my mortgage prospects?

Having adverse credit can limit your mortgage options. Lenders may perceive you as a higher risk, potentially leading to higher interest rates or the need for a larger deposit. It’s not a definitive barrier, but it does mean you’ll need to navigate the mortgage landscape more carefully.

Is obtaining a mortgage feasible with adverse credit?

Yes, securing a mortgage with adverse credit is possible. There are specialist lenders and products designed for those with less-than-perfect credit histories. These options might come with different terms compared to standard mortgages, like higher interest rates, but they provide a pathway to homeownership.

What actions can I take to enhance my mortgage chances with adverse credit?

Improving your credit rating is key. This can be achieved by consistently meeting all credit obligations on time, reducing overall debt levels, and ensuring your credit report is accurate. Building a larger deposit can also positively influence your application, as it reduces the lender’s risk.

Other FAQs

Are there mortgage products tailored for adverse credit?

Yes, several lenders offer mortgage products specifically for individuals with adverse credit. These products often take into account the unique circumstances of applicants with a history of credit difficulties.

How long does adverse credit remain on my credit file?

Adverse credit information typically stays on your credit file for six years. However, its impact on your credit rating decreases over time, especially if you demonstrate responsible financial behaviour and stability.

Will quickly clearing my debts rectify my adverse credit?

Clearing debts can improve your credit score, but it’s equally important to establish a consistent track record of responsible credit use. Sudden, significant debt repayment won’t immediately erase historical issues but will positively contribute to your overall credit health.

Does adverse credit have a permanent effect on my mortgage ability?

Adverse credit doesn’t permanently impact your ability to obtain a mortgage. As your financial situation improves and you build a record of reliable credit management, your prospects for securing a mortgage with favourable terms also improve.

Is it advisable to seek guidance from a mortgage advisor for adverse credit?

Absolutely. Consulting with a mortgage advisor can be extremely beneficial if you have adverse credit. We can offer expert advice tailored to your individual circumstances and guide you through the complexities of the mortgage market, helping you to find the most suitable options.

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