The Abundance Of Home-saving Mortgages For People With Poor Credit History.

Posted by Nick Niesen on October 29th, 2010

Did you know that every day the Citizen Advice Bureau deals with over 5000 new debt problem enquiries? And with interest rates rising, the chances are that more people will face problems with their debt - in fact there is likely to be a ten-year high for county court judgements in 2007 with around 1 million CCJs in total.

Getting a mortgage with poor credit can be a nightmare ? High St lenders will usually refuse your application if you have a default or a CCJ on your record. So what can you do about it?

There are two main credit reference companies in the UK ? contacting either one will enable you to find out what your credit rating is. However, if you have a County Court Judgement or a default then it is highly likely that your credit rating has been compromised.

A mortgage default is any violation of the credit agreement you have with your mortgage lender and could be issued even if you have only missed one payment. A default is registered on your credit file showing the date you broke your credit agreement, the amount you owed when the agreement was broken and the amount still owed.

A CCJ is issued by a judge at your local country court and follows a formal demand for payment from your creditor (which you have ignored) and then a ?Claim Form? which demands payment in 14 days or a written defence of your position. If you ignore this claim form your creditor will ask the court to send you a CCJ, which gives you 28 days to pay.

The main difference between a default and a CCJ, is that the latter can be withdrawn from your file if cleared within one month (28 days) whereas the former is there for six years.

So the good news is that if you have received a CCJ, a poor credit rating is not necessarily inevitable. In fact, by arranging a quick remortgage with a specialist lender you can pay off the debt and have the CCJ removed from your credit record.

The bad news is that both a default and an unpaid CCJ are on your credit record for six years ? that means any application for credit of any kind including a first-time mortgage or a remortgage will be assessed according to these negative credit score. And that means it?s unlikely any High St lender will accept your application whether it?s for a mortgage, credit card, overdraft or personal loan.

However, that?s not the whole story. There is a growing number of mortgage lenders specialising in people with a poor credit history. By arranging to remortgage with these lenders you can begin to repair the damage done to your credit rating by making regular payments with terms that suit your circumstances.

A quick remortgage can also help ease your debt problems by freeing up equity from home that you can use to pay off your debts, or by solving mortgage arrears or repossession issues with your previous lender.