An adverse credit rating, more commonly known as bad credit, does not mean that credit is no longer available. However, both existing homeowners and first-time buyers are able to get an adverse credit mortgage deal, provided sufficient home equity is available. The relative complexity of the adverse credit mortgage market means that homeowners turn to mortgage brokers in order to identify products that minimise mortgage repayments.

What is an Adverse Credit Mortgage?

An adverse credit mortgage caters for homeowners and first-time buyers who have missed payments on credit agreements during the past six years. There are varying degrees of bad credit, including late payments, loan defaults and County Court Judgments (CCJ’s). A CCJ is an adverse ruling by a court of law in respect of a borrower defaulting on the terms of a loan agreement. According to, 2,262 County Court Judgments (CCJ’s) were issued every day in 2008.

Are the Criteria for an Adverse Credit Mortgage Different?

In order to get an adverse credit mortgage deal, lenders normally require at least 20 per cent home equity. This is because bad credit customers with CCJ’s pose a greater risk of loan default. This risk will also be reflected in the interest and mortgage repayments. The mortgage itself works in the exact same way as a conventional mortgage. After six years, any bad credit no longer shows and it will be possible for a homeowner to get a standard mortgage.

Use a Mortgage Broker to get an Adverse Credit Mortgage

The adverse credit mortgage market for those with missed payments and CCJ’s is more complicated than for standard mortgages. A mortgage broker can be of invaluable assistance as they are able to trawl the market for deals that offer clients’ the lowest mortgage repayments. Brokers also have useful industry contacts, offer help with administration and negotiations. However, mortgage brokers charge up to 1 per cent of the loan value for their services.

Homeowners and first-time buyers with a bad credit rating because of CCJ’s, loan defaults or missed payments can still get an adverse credit mortgage. It is sensible to utilise the services of a mortgage broker in order to identify the best adverse credit mortgage deal. Monthly repayments will be higher than for a standard mortgage, but they do improve once a borrower proves creditworthiness.