Non Standard Mortgages - Impaired Credit
What Is A Bad Credit History?
Most people have a period in their lives when they are
short of money. Usually it is possible to tighten your belt,
weather the storm and somehow get through the sticky patch.
But sometimes the financial situation either becomes too
difficult to manage or does not take priority compared to
other matters in your life.
Divorce, redundancy, or illness can leave you with insufficient
funds to meet all your mortgage, HP, loan and credit card
payments. But even if you fall into arrears just for a short
time, the repercussions can last for much longer - credit
records usually run for 6 years.
It is estimated that one fifth of mortgage applicants
are not considered suitable for loans by the mainstream
lenders that operate credit-scoring systems. The reason
that people fail such checks is that mainstream lenders
operate in a world of percentages. They want a large volume
of low risk business - people who have a good credit profile
and who appear to represent the most likely group of people
to repay their mortgage on time. But if there is something
that is flagged in the credit scoring system, most mainstream
lenders will regard lending you money as a high-risk activity.
Many will not lend you money at all and when you can get
a loan, you will undoubtedly have to pay a higher rate of
interest than you would do otherwise.
You can fail the credit-scoring test for a variety of
reasons, though not necessarily because you have previously
defaulted on payments. Some of the more common reasons are
as follows:
All these things are normally recorded by the big credit
agencies and can prevent you from being offered the standard
mortgage products. Unless you have a particularly good relationship
with a lender - you may for instance have had current or
savings account with them for some time - then you may be
forced to go to a non-conforming lender.
