These are mortgages available to people who have an adverse credit record. For example, where people have suffered County Court Judgements (CCJs), defaults, convictions, bankruptcy or for any other reason have a poor credit record.
It can be expected that interest rates on adverse credit mortgages will be higher than the normal rates as the lenders perceive that there is a higher risk in lending in such cases. Interest rates will reduce as the “loan to value” (LTV) ratio reduces.
The LTV ratio refers to a comparison between the loan required and the value of the property to be mortgaged.
Lenders will typically consider lend up to 90% of the value of the property - depending upon the particular circumstances.
Tip: If you get turned down for a mortgage you should find out why. Ask the lender and if they won't say, write to the two main credit reference agencies - Experian (http://www.experian.co.uk) and Equifax (http://www.equifax.co.uk) - requesting a copy of your credit file.
