This FAQ is intended to answer a few of the questions you may have about adverse credit mortgages and the services that we at Hour House provide. Simply select an item from the list below and you will be taken directly to the relevant information. Alternatively you can browse through each topic by scrolling down the page.
Adverse credit mortgages are for borrowers who have credit problems such as county court judgments (CCJs), previous mortgage or loan arrears, bankruptcy or voluntary arrangements (IVA) with creditors.
If you have a lot of debt and you are looking to consolidate your loans and credit cards we can also help. You may not have bad credit yet but if you are concerned that if you do not review your affairs you could find yourself in a vulnerable position then please contact us. It would be great if we could restructure your debts to avoid a credit problem in the future.
Adverse credit mortgage products are for borrowers who cannot get a mortgage from a traditional high-street lender because they do not fit the lending criteria.
Traditionally, adverse credit homeloans have higher interest rates because of the increased risk to the lender. However, adverse credit mortgages are now more readily available and they are not really all that different to the mortgage products offered by the high street.
The level of impaired credit is, generally, categorized as 'light, medium or heavy'.
We want to help you to ease your debt problems - homeowners can remortgage to reduce their monthly outgoings, save money and release cash.
As many as one in five people in the UK have what is regarded as a poor credit rating. People falling under this category have a wide range of occupations, income levels and ages.
There are many reasons why people get turned down for a high-street mortgage. Many people may not realise that one of the most common reasons is paying a bill late.
Other reasons include having CCJs against you, a bankruptcy in the past or financial problems as a student. Some people, such as those who have lived abroad or recently divorced, may not even have their own credit record.
An adverse credit mortgage gives people who are classified as 'non standard' the opportunity to buy or remortgage a property and rebuild their credit rating.
We work with both specialist lenders and high street lenders. Traditionally this has been a specialist market, however, over the past few years the market has developed with more high-street lenders are now involved. Many of them have done so under subsidiary brands to distinguish them from their mainstream products.
Some adverse credit lenders will want references such as proof of income and some proof of recent loan or mortgage repayments to help them decide the severity of the credit problems. Specialist lenders tend to assess each case individually and they will take the time to assess when and why the problem occurred, who the default was against and what has happened since.
Effectively, the lenders we work with are looking to give you a 'second chance' by considering your potential to repay a mortgage rather than looking just at your past history.
There are no real drawbacks but you would usually find that interest rates are slightly higher than those of high-street lenders. The higher interest rate reflects the increased risk taken by the lender in lending to someone who has had previous financial problems.
Early Repayment Charges are, generally, a feature of Adverse Credit Mortgages but these are rarely more restrictive than other mortgages. All penalty charges will be explained in full.
If you have stayed with your lender for a period of time (usually around three years), successfully made your repayments over that time and have no outstanding defaults or CCJs you should have 'repaired' your credit rating. At this point you should be able to remortgage to a standard mortgage deal through your existing lender or a high-street provider.
Some lenders limit the amount they'll lend on certain types of property, for example timber-framed houses. Sometimes they'll refuse to lend at all - perhaps because the property is very old, unconventionally built or structurally unsound. However, if you shop around, you should be able to find a lender who understands the risks involved in the kind of property you want to buy.
It's important to give your lender as much detail as you can about your income and outgoings - so that you're not offered a mortgage you can't afford.
We will provide a 'Keyfacts illustration' which will show all of the costs involved. Not only does it show the monthly mortgage payments but also each and every cost you will incur.
Remember to budget for the one-off costs such as administration, valuation and solicitor fees and Stamp Duty (purchases over £125,000).
Your first step is to contact a mortgage broker who has experience in the area of adverse credit lending and non standard mortgages. You can do this by simply completing the no obligation contact form on this website.
An Independent Broker will look at your individual circumstances and find the best mortgage for you. We can help you find a mortgage even if you have been turned down elsewhere.
Each enquiry will be dealt with by an experienced advisor in a constructive and sympathetic manner. If you have County Court Judgments, credit card defaults, loan defaults, mortgage or rent arrears, bankruptcy, IVA, are self-employed or have difficulty proving your income, we can help you.
Just get in touch, tell us about your situation, and let us do the hard work. And, most of all, we can assure you of total confidentiality.