Don’t Fret If You Have Adverse Credit

It is easy to feel as if you are swimming against the tide or fighting against a never-ending wind when you have the tag of ‘adverse credit’ looming above your head. For many individuals, the scary world of debt can become a constant and cyclic process, with the chances of getting out or moving on slimming with each step. Many of these things, however, are all psychological and there are a number of ways for individuals with adverse or bad credit to own a home.

Whether that seems like a pipe dream, a fantasy or as if there is a trick up our sleeves, we have created a guide to the numerous methods that helps to smooth out your bad credit worries. From secure loans and debt management plans through to government schemes and what to do with small credit problems, take a look at the solutions and opportunities below:

  1. 90% Loan To Value: LTVs are a commonly-used type of mortgage that works on a percentage of the property value. These vary to help people who cannot raise enough funds for a 50% deposit – which is almost everyone in the UK – and some come as varied as 90% loan to value. This means that for a property valued at £100,000, you will need to raise or have £10,000 ready to use for the deposit. For those with adverse credit, this is good way to earn the trust of a mortgage lender and get started on the right foot although it requires a large sum to be saved first.
  2. Help to Buy Equity Scheme: The government have issued a number of services to help first-time buyers and those in difficulty. One of the stand-out schemes which came out of this was the Help to Buy Equity Scheme. For those with adverse credit or bad credit, the scheme gives you the chance to raise just 5% of the property value to secure a property – normally a new-build. The government will make up the other 20% for the property depending on the range of criteria they have set out around your employment and family situation.
  3. Historic Debt Management Plans: Whether you have inherited an estate or have been working to even out your debt for a long time, you may find yourself in a Historic Debt Management Plan. However, there is no reason to worry about this being detrimental to achieving a mortgage. These are merely considerations that any mortgage lender will seek to know more about in the discussion stage.
  4. Other aspects to consider for your bad credit mortgage: Mortgage lenders have become savvy enough to get the right deals, but they are still looking for people who they can trust with their mortgage schemes. If you are struggling with small credit problems from your past, it pays to be completely up front about the problems to any mortgage lender you are in contact with. Also, do not worry about communicating with different mortgage lenders to understand their position relating to adverse credit and the deals that they can offer for your specific situation.

If you would like to find out more about the expert advice and help we can provide at MacFarlaine & Brooks, speak with us today.

The purpose of this blog is to provide technical and generic guidance and should not be interpreted as a personal recommendation or advice.


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