Some lenders only want to work with people who have impeccable credit histories, flawless employment records, and sufficient deposits when it comes to purchasing or remortgaging a property.
But troubles with one’s finances may impact everyone. A loan default, a judgement from a county court, late payments, or having a previous bankruptcy that was dismissed may all negatively impact a person’s credit.
Sometimes individuals fall into debt through no fault of their own, and when this happens, they want to make things right even if they were the ones who caused the problem. When applying for a mortgage, the last thing anybody wants is for their home to be taken away by the bank.
The good news is that certain mortgage lenders will work with borrowers who have less-than-perfect credit. Adverse credit market lenders, often known as “sub-prime” or “non-conforming,” are likely to demand higher interest rates than conventional mortgage lenders.
As usual, applicants will need a stable source of income, and a deposit of 15% of the property’s worth or more may be required.
Although it is obvious that the lenders want to maintain a certain degree of distinction between their conventional and adverse credit divisions, the terms of the agreements that they are now giving are far less stringent than in years past. If borrowers have a track record of timely payments, the majority of lenders will reduce the interest rate. In addition, after three years, you may be able to refinance into a more traditional loan.