Poor Credit Advice

Everyone will be aware of the recent credit crisis, and may also be aware of the effect is has had on the property and mortgage market. However, what is the result for borrowers with poor credit?

Poor credit, caused by blemishes on a borrower’s credit record, places the borrower in a high risk category when lenders are considering their application for credit.

Previously missed mortgage or loan repayments, County Court Judgements or bankruptcy will all be recorded on a borrower’s credit record, and will count against the borrower when future applications for credit are made.

Poor credit borrowers will be considered as a risky option, and although previously lenders were still willing to take the risk and lend money – albeit at a higher rate of interest than customers with clean credit histories – since the credit crisis many lenders are now tightening their criteria, and declining applications from borrowers whose poor credit places them outside of the lender’s acceptance criteria.

Lenders now also require that more equity is available in the borrower’s property, which has resulted in the reduction of deals with high Loan to Value ratios. So borrowers who wish to remortgage up to 100% of their property’s value will struggle finding a new deal.

The good news is that mortgage deals are still available for poor credit borrowers, some with favourable rates. The More Group specialise in arranging mortgages and remortgages for borrowers with poor credit – to speak to one of our mortgage experts and see how we can help, complete our online form. Any advice we provide is completely free and carries no obligation at any stage.