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An adverse mortgage is for around 25% of the UK population,
the type of mortgage required. In the late 80s and early 90s
many people found themselves with negative equity (where the
property price is less than the mortgage outstanding) add
to that redundancies, as well as other unfortunate personal
situations. These naturally gave a lot of people an adverse
credit status.
Adversity is something that can happen to any of us at any
point in time. However in the areas of finance it used to
be a situation where you became an outcast. Bankruptcies,
Individual Voluntary Arrangement, Defaults, County Court Judgements,
missed payments on your mortgage; these are areas most lenders
looked on in varying degrees of bad light.
In the UK getting an adverse mortgage used to be a long drawn
out process and often meant you had to trawl the high street
more or less cap in hand and hope that you would eventually
meet the right lender that would take pity on you.
These days adverse mortgages/remortgages are a bit easier
to get, I would recommend getting Independent Mortgage Advice,
where there are no loyalties to any particular lender, and
the advice is for your interest and benefit.
Once you have found an Independent Mortgage Adviser who deals
with adverse mortgages, the most important thing is to tell
them everything. I would always find out how long they have
been in the profession, personally I have done 18 years (time
off for good behaviour) and however embarrassing you feel
your adverse situation is, I am sure they will have dealt
with cases worse than yours. I mention this because a lot
of people think that if they don't mention something then
it doesn't exist, well it does and it will probably turn up.
The lender will expect you to be upfront and some will turn
down your application if they feel you are trying to get one
over on them.
With an adverse or sub prime mortgage as they are sometimes
called, the rates are normally higher than the normal, I look
at it as a means to assisting you to repair your credit record,
if you are able to keep all your mortgage payments up to date
for a period of time then your picture will start to look
better and more avenues will open up. For example keeping
your payments up to date for say 2 or 3 years with an adverse
mortgage lender, should enable you to remortgage over to a
prime lender and a lower rate of interest on your mortgage.
If you have been turned down for a mortgage or another form
of credit you will be told to check your credit report. This
can be an indication that you may have adverse credit, although
sometimes it can be down to inaccuracies on your report, which
you can challenge. If you know you have adverse credit status,
then getting the services of an experienced adviser will save
you a lot of time.
We advise in adverse mortgages and remortgages and look for
the best solution for the person we are advising as well as
helping them to repair their credit status for the future.
In many cases we can also arrange these on a self cert/non
status basis.
A typical fee for Mortgage advice is 0.5% of the Mortgage
amount.
THE OVERALL COST FOR COMPARISON IS 6.7% APR TYPICAL. THE
ACTUAL RATE AVAILABLE WILL DEPEND UPON YOUR CIRCUMSTANCES.
ASK FOR A PERSONALISED ILLUSTRATION.
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