Basically Adverse Mortgage Lenders will expect applicants to have a combination of arrears on loans, mortgage or rent, defaults on loans or rent, County Court Judgements (CCJ’s), individual voluntary arrangements (IVA’s) or bankruptcy orders. It is the number of these and how they have been satisfied that will determine which category each particular adverse re-mortgage applicant falls into.



Applicants for adverse mortgages can usually be divided into three areas in terms of risk: low/light adverse, medium adverse and heavy adverse.



A rough guide to how adverse is calculated.



Low/light adverse: no bankruptcy orders or IVA’s. CCJ’s of between £500 and £2,000 and between 3 and 6 months arrears on loan/mortgage payments.



Medium adverse: CCJ’s of between £2,000 and £5,000. Arrears between 6 and 12 months, no IVA’s or bankruptcy orders.



Heavy adverse: CCJ’s of over £5,000, arrears of more than 6 in last 12 months, any IVA or bankruptcy orders



Most adverse lenders use the most serious circumstances to determine what level of adverse credit a borrower has and what interest rate loading will be applied to the re-mortgage.



In recent years the number of people with debt problems has risen. This has increased the pressure on lender to provide an alternative. Mortgages are always approved on an individual basis. That’s why it is in your interest to talk to and adverse credit mortgage broker (something about Heron here). They will be able to access your situation and give advice on how to best meet your needs.



Although the interest rates may be higher than standard and there may be restrictions applied to you, with some lenders schemes there are also rewards for paying on time. In addition, if you repay your adverse credit mortgage in accordance with the lenders requirements, then your credit history could be cleared three years afterwards.



To find an Adverse Credit Mortgage Lender or get more information a Debt Consolidation Loan With Bad Credit visit the Heron Mortgages website and ask them for a quote.



If you have had problems getting a standard mortgage and the reason for being declined is your credit history, then you should seek advice about obtaining an adverse credit mortgage. The right advice, coupled with a pro-active attitude to managing your debts could set you on the right course for financial stability.



There is also another group of people who qualify for an adverse credit mortgage. If you are self employed, self cert mortgages may be the only possible way for you to obtain a mortgage for your home and this type of mortgage is also considered under the same banner as the adverse credit mortgage.



If you apply for an adverse credit mortgage you should expect to pay a slightly higher interest rate than for a standard mortgage. The loading will depend on the level of bad credit.



The good news is that an adverse credit mortgage can help to repair your credit history. If you make all payments on time your credit history looks much better in a couple of years. Some people also take the opportunity to consolidate their debts so that there are no negatives on their credit report. So if your credit is less than perfect it may be worth considering an adverse credit mortgage.