Sub Prime Lenders - Get A Mortgage With Bad Credit

Even if you have a bad credit rating, you may be pleasantly surprised to discover that there is a sector specifically catering to individuals like you. Brokers who specialize in adverse credit can help you find a mortgage deal that suits your needs.

It's important to note that you will likely face higher interest rates compared to those with better credit histories. This is because a poor credit rating represents a higher risk to lenders. Ironically, this higher risk is the reason why the 'bad credit' sector is flourishing—there are many people who do not meet the stringent criteria of traditional mortgages, and lenders can earn significant commissions from these higher-interest deals.

Tread Carefully

Be cautious, as there are many disreputable lenders who prey on unwary borrowers. Some may charge application fees or offer less favourable terms. To find a reliable lender, consider recommendations from trusted sources or visit reputable websites such as [mortgagesorter.co.uk](http://www.mortgagesorter.co.uk) and [yourmortgage.co.uk](http://www.yourmortgage.co.uk), which offer information on credit-impaired mortgages and suggest reliable providers.

Recently, mainstream banks and building societies have started to explore the bad credit market, recognizing the potential customer base they may have been missing. As a result, around a dozen lenders now offer 'sub-prime,' 'credit impaired,' or 'complex prime' mortgages. Another term used is 'non-conforming.'

Complex prime deals are tailored for unusual cases that do not fit the standard mortgage requirements—such as individuals with income from shares or pensions who might be turned down by mainstream lenders. These deals still offer a range of options, including fixed-rate, capped, or discounted mortgages.

Your credit rating may be classified as light, medium, or heavily adverse, depending on the type and extent of the issues, such as defaulting on payments, mortgage arrears, bankruptcy, or County Court Judgments (CCJs).

The good news is that after approximately three years of maintaining a sub-prime mortgage deal, your credit rating is likely to improve. At that point, you may be able to re mortgage through the mainstream market and secure a lower rate.