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Bad Credit Mortgage: What To Beware Of
By SeanH-9584
People often ask if you
can get a mortgage if you have bad credit. The
answer is, yes.
A decade ago it was much harder. If you admitted to having
a credit record that was less than perfect � or if checks
revealed any blemishes � prospective lenders would hold up
their hands in horror. Then they would use this as an
excuse for slapping on sky-high interest rates, high
deposits and all sorts of restrictions on your mortgage
� if they would let you have one at all.
Now there are a lot more mortgages available for
people with past credit problems. And the greater
competition means that the interest rates on a bad credit
mortgage, though higher than on a standard
mortgage, are not as high as before.
So if you come into this category, does this mean
everything is fine now?
Well, it rather depends on the reasons why you have bad
marks on your credit file. If you have just had a few
hiccups in recent years for understandable reasons �
marital breakdown, for instance, or frequent house moves �
it shouldn�t be too difficult to get a bad credit
mortgage with a mainstream lender.
If your problems are more serious � for example if you
have one or two CCJs (county court judgments) or a
persistent record of defaulting on payments � it will be
more difficult to get a bad credit mortgage, but
still possible. But in this case there are things you need
to be careful of.
�The bad credit mortgage market is becoming an
attractive one as debt figures rise. The lenders will try
to convince you they are doing you a favour and will try
to charge you more than necessary. But remember they are
in it for their own benefit, not yours. Do shop around.
�Be careful about the advice you are given. If you seek
advice from one of the specialist lenders of bad credit
mortgages,
they may come across as very caring, but their main object
is to sell you a mortgage. They won�t be too
concerned as to whether you can afford it or not � or even
whether you actually NEED it. Make sure you get qualified
and unbiased advice.
�If you have a lot of debts it will be tempting to roll
them all into the bad credit mortgage. But remember
the debts will still be there. Do you really want them ALL
secured against your house � especially if you haven�t
been all that good at managing your payments?
�Beware of companies advertising �bad credit mortgages�
on TV or in direct mailings. Some of them charge up to a
3% fee to arrange one of these mortgages. On a
six-figure mortgage this comes to a LOT of money.
�Take steps to check out which lenders are likely to
accept you BEFORE applying. Every time you apply and get
rejected, this will show up on your credit rating and make
it even worse!
It�s really important to take advice from an independent
mortgage broker � and make sure it�s one who has access to
bad credit mortgages. This way you can be sure of
finding a solution that�s in your interests, not that of
the lenders.
Article Source:
http://www.articlemap.com
Sean Horton is a Director of Enhanced Wealth Limited who
are a specialist
mortgage broker offering expert advice on
bad credit mortgages
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