Past Credit Problems Make It Hard To Get A Mortgage

If you have a poor credit history it is going to be difficult to get a mortgage but it might be possible. Before the credit crunch sub-prime mortgage lenders were riding high in the UK mortgage market. There were simply dozens of them, from standalone lenders to US investment banks. Even the Britain's high street banks wanted their piece of the bad credit pie.

The sub prime market started as a small niche sector where applications were examined on a case-by-case basis by experienced mortgage underwriters. But as the sub prime sector grew, it became automated and applications were approved by computers not people. This meant that mortgage could be agreed within a minute - as soon as you had entered your details and were allocated into the appropriate category for the severity of your financial problem.

For example, you could be classed as "near prime", meaning you had just slipped out of the mainstream mortgage market, if you had missed a credit card payment. Next came ultra-light, light, medium, heavy and unlimited adverse categories. The latter category was for those who had the most tarnished financial background - maybe an ex bankrupt and outstanding arrears on their existing mortgage. But as long as they met specific criteria, lenders would offer them a deal at a price!

Back in 2007 the sub prime market was booming with new lenders entering the market and this was accompanied by increasing numbers of borrowers falling into the sub-prime category, which was not a good sign in itself!.

Of course we all know what happened next - the credit crunch. This destroyed the sub-prime mortgage market. Nowadays most of the sub-prime lenders have shut their doors. Many of the American banks have either gone bust or withdrawn, tails between their legs, and borrowers with a poor credit history find it extremely difficult to find a mortgage.

So here is the key question - what are your options left if your credit record is tarnished? Well, at the very heavy end of sub-prime, there is little available for those who have just emerged from bankruptcy. In 2007 there were thousands of mortgage options available for people who had recently been bankrupt. Nowadays there are virtually none. One solicitor has commented that if a lender can be found, a borrower can expect to pay up to 16 in interest and require a sizeable deposit to boot and anyone becoming bankrupt is in effect making them un-mortgagable.

However, there will be mortgage lenders that will offer their mainstream products to those with minor financial problems such as a missed phone bill or credit card repayment. But if you have something serious such as a County Court Judgement, an IVA or bankruptcy you'll need a specific sub-prime deal and, as you can see, they're neither widely available nor cheap. If you're in that situation you really need to see a mortgage broker who can search the whole market for you and see what they can come up with.

Want a cheap loan, then visit Loan Specialist. At the Loan Specialist website you can read information and articles Cheap Loans. So get a quote today.