Non Standard Mortgages - Impaired Credit
Light Adverse And Credit Repair Mortgages
Light adverse and credit repair mortgages plug the gap
between mainstream loans and the more extreme cases of the
sub-prime mortgage market.
Credit repair mortgages are schemes that give the borrower
an incentive to stay on the straight and narrow by rewarding
mortgage borrowers who maintain a 100% credit record. This
usually takes the form of successive reductions in the rate
of interest payable over a number of years. These are particularly
popular among those with minor credit problems who are eager
to clear their history but who are open to the idea of being
encouraged to take a responsible approach.
Light adverse mortgages are designed for people who are
just on the margins of the sub prime market, whose credit
history is only slightly less than perfect, but who may
well still struggle to get a mortgage from a mainstream
lender.
Almost everyone who ends up getting a light adverse or
credit repair mortgage would also be accepted for a sub
prime mortgage. However, they would be unnecessarily penalised
with too high a rate, due to the fact that the plan is designed
for people with more serious credit problems. The advantage
with a light adverse credit mortgage is that because the
mortgage is designed for people with less than severe credit
problems, the risk to the lender is lower than with other
sub prime mortgages, so the LTV can be higher and the interest
rate can be lower.
Past credit events that may call for a light adverse credit
mortgage include not appearing on the electoral roll, maintaining
several different jobs, moving house repeatedly in a fairly
short space of time, very minor CCJs or ones that are soon
to be removed from the credit record following a long spell
of unblemished payment records.
