The term bad credit mortgages is never music to a borrowers’ ears, yet for a variety of reasons, it might be that they find themselves falling into the bad credit mortgages camp. It would appear that, these days, having a bad credit score is not a problem when it comes to funding your home – after all, bad credit mortgages are advertised everywhere.

But, while it might be easy to secure this type of borrowing, consumers need to be especially careful about the deal they end up with; after all, once you start paying for bad credit mortgages is too late to understand the steep interest rates and tie-ins involved. That’s why it is imperative that you seek advice from an independent broker that specialises in bad credit mortgages first, like The Mortgage Broker Limited (TMBL).

What exactly are bad credit mortgages?

As they say on the tin, bad credit mortgages – also known as adverse credit, impaired credit or subprime mortgages – are designed to cater for borrowers with a low credit score on their personal credit file. This file is held (but not determined) by one of three credit reference agencies in the UK; namely Experian, Equifax and CallCredit. There are three primary levels of bad credit mortgages, light, adverse and heavy with several ‘shades of grey’ in between – but fundamentally, where you fall on this scale will determine the cost of bad credit mortgages.

Why would I need to look at bad credit mortgages?

At the end of the day, bad credit mortgages are loans of last resort – so why would your credit score be bad enough to warrant one? The straightforward reason is because you have either defaulted or been late in paying any debt. This could be any agreement from a mobile phone to a credit card to your Council Tax payment. Each of these ‘mistakes’ will appear on your credit score and can result in a County Court Judgment (CCJ) against you. The number of these CCJs you have on your file, with other information, will affect your credit score and, in turn, what level of bad credit mortgages you will need to opt for.

If I have to apply for bad credit mortgages, is it always my fault?

Consumers can often be left having to apply for bad credit mortgages through no fault of their own. Life changing circumstances such as a divorce, illness in the family or the collapse of a business can often result in bad credit mortgages.

What’s the difference between standard and bad credit mortgages?

The main point of difference between standard and bad credit mortgages is their cost. Depending on your circumstances, bad credit mortgages can be 100 per cent more expensive that the most competitive standard deals on the market – and even almost the same price if you only have a spattering of bad credit. But as the borrower poses a higher risk in the eyes of the lender, bad credit mortgages of any level can require a larger deposit than on mainstream deals. Bad credit mortgages can also come with some hefty upfront fees and restrictive tie-ins.

How can I get rid of bad credit mortgages?

The good news is that you will not have to stick with bad credit mortgages for ever. Having shown you can repay the loan successfully for a period of up to three years, you will then be eligible for a cheaper ‘high street’ mortgage again. That’s why you should never look at bad credit mortgages that carry tie-ins for more than three years.

How do I apply for bad credit mortgages?

It’s easy to apply for bad credit mortgages but there are an increasing number of pitfalls to navigate. As well as the three-year tie-in rule, the recent credit has meant many providers of bad credit mortgages have tightened lending criteria which makes the help of an experienced broker like TMBL more necessary than ever.

The UK’s personal debt figures in the year 2007 was an estimated £1,355 billion, such incredibly high debt figures coupled with the fact that inflation rates are at an all time high, indicate hard times for people who want to avail bad credit mortgages. However like any other investment, obtaining a bad credit mortgage calls for caution and restraint as well as plenty of market research.

Unlike, the investment scenario a few years back where getting a mortgage with bad credit was next to impossible, today those with adverse credit or bad credit can easily avail bad credit mortgages. Obtaining mortgages with bad credit essentially mean obtaining a mortgage on the property you want to buy even when your credit record isn’t too clean.

A look at the credit market scenario will tell us that the bad credit mortgage UK is essentially an outcome of market needs, based purely on the fact that it is the housing market which would ultimately suffer. This is more so because bad credit is no longer an exceptional case but quite rampant in today’s society, hence as a result rules and laws accommodating the new scenario are the only way out.

Individuals with bad credit have plenty of options in the amount of lenders who are willing to provide bad credit loans. A search on the Internet will provide you with a comprehensive list of poor credit mortgage lenders both small and big who are willing to provide you with a bad credit mortgage repair loan. However, before you actually avail bad credit home loan there are some elements about such a deal that you need to keep in mind.



Be careful about being intimidated about the interest rate that is being levied on you. If you find it extraordinarily high, search for another bad credit mortgage company who will give you better interest rates and repayment options too.

Read the terms and conditions within the document carefully. Often there are hidden fees or costs involved which are given in fine print that you may not be aware of.

Borrowers should take up a bad credit loan mortgage offer based on the overall proposition and not only the interest rate.



Since the bad credit loan market is a risky one, you might consult a bad credit consultant, for best advice. Also make sure that when you approach bad credit mortgage lenders that they specialise in bad credit mortgage and not mortgage for normal lenders. This will ensure that the lender will make several concessions for you based on your situation and be able to guide you so that it is easier for you to repay the loan.

Some of the basic requirements for applying for bad credit mortgages in UK are that, you should be a resident of UK, you should be over the age of 21 and more importantly you need to have a steady source of income. There are different types of mortgages for people with bad credit that you can avail depending on the severity of your credit situation, the location, etc.

In fact even the interest rates on mortgage for bad credit are decided based on the time between the mortgage application and the time of credit problems. However thanks to the competition in the bad credit mortgage lender market, the interest rates these days aren’t totally overbearing.

Bad credit mortgages, if applied correctly, they may actually help you to improve your credit rating by paying back on time.