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How to Get a Mortgage With Poor Credit History

If you are looking into how to get a mortgage even though you have poor credit you will need to approach with caution. There are more places offering bad credit mortgages but you will need to shop around to ensure you get the best deal. Some lenders charge extra-high interest rates to bad credit lenders, while others have strict penalties and regulations.

If you are experiencing financial difficulties, you will need to consider whether obtaining a mortgage would financially overstretch you.  According to the Mortgage Centre, as many as one in four people in the UK have had their standard mortgage applications refused.

This has led to a dramatic increase in financial institutions offering bad credit mortgages. Specialist companies, as well as the mortgage market's leading lenders, have all designed specific mortgage packages especially for people with a poor credit history.

A bad credit mortgage is more or less the same as an average mortgage, except the repayment period may be longer, interest rates may be higher and there may be strict terms and conditions attached to the mortgage.  Mortgage specialists UK Financial Solutions offer adverse credit mortgage loans. Like most financial institutions many of their companies will only loan a person with adverse credit 75% of the property's value.

This means you are potentially looking at a 25% deposit. The interest rate is subject to individual circumstances, but is higher than standard mortgages. However, there is the potential for the interest rate to decrease in the event that you only borrow 60% or less of the property's value. Clydesdale bank offer competitive rates for their bad credit mortgage customers, however their interest rates are subject to status.Starting at as little as 4.5% APR, Clydesdale bank also let you borrow up to 65% of the property's value.

The only real drawback is the £399 application fee for existing customers and £999 for new ones. The citizens advice bureau offer a free service that includes advice for people who want to know how to get a mortgage with bad credit. They will arrange for you to see a financial advisor for unbiased advice regarding your mortgage options.

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