Adverse Credit Happens When People Default On Debt Repayments

Category: Finance, Mortgages.

Most people probably assume that obtaining a mortgage to purchase a home, refinance or to consolidate debt after a bankruptcy is out of the question. Loan programs and lenders are available that require little or no time after the discharge of a bankruptcy.

In fact, many people are able to obtain these mortgage services, even 1 day after a bankruptcy discharge in some cases. Here are a few tips to speed up the road to credit recovery and the mortgage services you desire. Second, limit the amount of other debts such as credit cards or bank loans. First, continue timely paying having at least a couple credit items you are paying on time will help. Too much debt will make it more difficult to qualify for a loan, particularly revolving credit accounts such as credit cards. Follow the tips mentioned earlier and more options are usually available 6 months to a year after the bankruptcy discharge.

If you are unable to qualify for a loan initially, be patience this process takes some time. There are other types of mortgages. Self Cert mortgages allow these people to bypass the stringent income validation criteria normally associated with most other mortgage types. Self cert mortgages are mainly designed for the self- employed and people with an irregular flow of income. As the number of self- employed arises in the UK, traditional mortgages fail to cater for their requirements. Instead their money comes in when their invoices are paid, in variable amounts and in irregular intervals. Many just do not have a regular, fixed amount of pay.

A true self cert mortgage will require you to declare what your income is, but documentary proof is not necessary. When an individual makes an application for a mortgage, the lender has the facility to search the person s credit files to determine what sort of risk they present. An adverse credit mortgage specialist has access to all the mainstream and specialist lenders who are sympathetic to people with previous financial problems. Individuals who have experienced adverse credit problems in the past are often turned down for a mortgage by high street lenders as they are regarded as high risk. More and more lenders are active in this niche market and products have become more competitive in recent years. However all is not lost and the good news is having an adverse credit history does not necessarily prevent you from securing a competitive mortgage or remortgage. The adverse market was estimated to be worth �25bn in 2006 and is expected to grow in the next few years, mainly due to unprecedented levels of consumer debt.

Levels of consumer debt through credit cards, loans and store cards are at record levels. More and more people are likely to have tainted credit records due to increasing amounts of arrears, CCJ mortgage and the increasing use of IVA mortgages and bankruptcy proceedings. Adverse credit happens when people default on debt repayments. The options open to you will depend on whether you fall under the light, medium or heavy adverse classification and what amount of deposit you have available to purchase your home.

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