{"id":5408,"date":"2022-09-25T05:55:26","date_gmt":"2022-09-25T05:55:26","guid":{"rendered":"http:\/\/127.0.0.1\/wordpress117\/?p=5408"},"modified":"2022-09-25T05:55:26","modified_gmt":"2022-09-25T05:55:26","slug":"bad-credit-mortgages-increasing-but-in-the-event-you-take-one-out","status":"publish","type":"post","link":"https:\/\/tdafinance.com\/loans\/5408.html","title":{"rendered":"‘Bad credit’ mortgages increasing, but in the event you take one out?"},"content":{"rendered":"

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The quantity of ‘bad credit’ mortgages has risen by 118 previously 6 months, based on Moneyfacts.<\/strong><\/p>\n

The comparison site says that there are now 843 bad credit mortgages specifically aimed at people with a bad credit score scores.<\/p>\n

But if you’ve had a County Court Judgment (CCJ) or defaulted on a payment in the past, in the event you take out a bad credit mortgage or wait to construct your credit rating back up?<\/p>\n

Below, we explain how bad credit mortgages work and explore their pros and cons.<\/p>\n

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How do bad credit mortgages work?<\/h2>\n

Bad credit mortgages, formally referred to as credit repair mortgages, are made to help those with poor credit scores get to the property ladder or move house. They currently account for 17% from the mortgage market, based on Moneyfacts.<\/p>\n

These mortgages are targeted at homebuyers who're at the more extreme end of bad credit – for example individuals with CCJs, individual voluntary agreements (IVAs), or bankruptcies – instead of those who’ve missed the odd utility bill payment or simply not built up a credit history.<\/p>\n

Bad credit mortgages tend to come with far higher rates than average, reflecting the increased risk towards the lender. Moneyfacts says the typical rate of the bad credit mortgage has increased by 0.17% in the last six months, currently standing at 4.52%.<\/p>\n

The average rate of the two-year fixed-rate mortgage, meanwhile, is simply 2.54%.<\/p>\n

Which lenders offer bad credit mortgages?<\/h2>\n

While you will find more and more mortgages specifically designed for those who have poor credit, some lenders will consider giving normal residential mortgages to people with chequered histories.<\/p>\n

It will depend in your individual circumstances and the reasons for your financial hardships. For example, some lenders will view your application more favourably if illness, divorce or bereavement contributed to your difficulties.<\/p>\n

Bad credit mortgages can be found by specialist lenders such as Magellan Mortgage loans, plus a number of smaller mortgage providers (The Mortgage Lender as well as other building societies) and even a couple of high street names for example Metro Bank.<\/p>\n

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What would be the benefits and drawbacks of poor credit mortgages?<\/h2>\n

Pros of poor credit mortgages<\/h3>\n

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Cons of bad credit mortgages<\/h3>\n

<\/p>\n

Keep in your mind that taking out a mortgage is really a major expenditure. If you get behind inside your payments, your home may be repossessed, as well as your credit record are affected. So before applying for a mortgage, make sure you can afford the repayments, both now and if your circumstances alternation in future.<\/p>\n

How to build your credit score<\/h2>\n

While many lenders will consider you for a mortgage even with low credit score, you’re more prone to be offered a good deal if your credit history is comparatively good.<\/p>\n

Here are several steps you can take to enhance your credit history:<\/p>\n

    \n
  1. Check your current credit score with Equifax, Experian and Noddle. Should there be any errors on the reports, have them amended.<\/li>\n
  2. Ensure you’re around the electoral roll. This is quick, simple and easy , allows agencies to higher track your history.<\/li>\n
  3. If you’re renting, pay your rent via the Rental Exchange scheme – this will count towards your Experian credit score.<\/li>\n
  4. Don’t apply for too much credit, or multiple credit products in a short period of time if you’re getting turned down. This implies to lenders that you’re in financial difficulty.<\/li>\n
  5. Ensure that you simply do have some <\/em>credit, for example a credit card that you simply pay off in full every month, because this proves that you could be trusted to pay for a loan back.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    The quantity of ‘bad credit’ mortgages has risen by 118 previously 6 months, based on Moneyfacts. The comparison site says that there are now 843 bad credit mortgages specifically aimed at people with a bad credit score scores. But if you’ve had a County Court Judgment (CCJ) or defaulted on a payment in the past,<\/p>\n","protected":false},"author":1,"featured_media":5404,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[32],"_links":{"self":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/posts\/5408"}],"collection":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/comments?post=5408"}],"version-history":[{"count":0,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/posts\/5408\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/media\/5404"}],"wp:attachment":[{"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/media?parent=5408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/categories?post=5408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tdafinance.com\/wp-json\/wp\/v2\/tags?post=5408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}