Bad Credit Secured Loan
Many people don't know they've got bad credit until they are refused a loan or told they need an adverse credit mortgage by their broker. Others believe their bad credit rating is a lot worse than it actually is.
Lenders look at adverse credit with varying degrees of sympathy and the key is knowing which mortgage lenders will be most sympathetic to your circumstances.
Open Choice Mortgages has expert knowledge of which lenders will be willing to help.
Contact us now about a Bad Credit Secured Loan
Causes of Adverse Credit
Over Borrowing
The most common cause of adverse credit in South Wales is poor money management. It is sometimes hard to prioritise debt correctly and many people borrow because they are anxious to improve their living standards and consequently take on too many financial commitments.
Divorce & Separation
Divorce and separation are common causes for adverse credit in Wales. Quite often, communication channels between the parties involved have broken down, and bills - especially mortgage payments - are not met, accumulating spiraling debt.
Rising Unemployment
In the current climate of rising unemployment, if the worst happens, especially without the protection of mortgage payment protection insurance (MPPI), the sudden reduction in income can cause financial hardship leading to missed payments on mortgage, credit cards and other set financial commitments.
Interest Rate Rises
We've all heard someone complaining that their mortgage payments have increased alarmingly, the main reasons being:
- They were placed on a low rate mortgage for the first year or so, e.g. 4.75% which after the scheme period reverts to the lenders standard variable rate e.g. 6.75%.
- Earnings have stayed level or risen only slightly whereas interest rates have increased due to changes in the base rate set by The Bank of England
Although small in numerical terms, a 2% increase can make a huge dent in disposable income or put the borrower under severe financial pressure.
Sickness
Sickness or injury can cause financial difficulties as many companies in England & Wales have reduced the duration of, or stopped paying, full salary sick pay, leaving people with only government statutory sick pay (SSP) on which to live.
Critical Illness / Death
When a partner dies, especially if it is sudden or unexpected, family income may be reduced and coupled to the stress of the situation, many people find it difficult to cope and put off or cannot afford to settle their financial commitments leading to an adverse credit score.
Credit Cards
Many credit cards are in joint names, meaning debt can be accrued without the knowledge of the bill payer, resulting in financial instability due to insufficient income coming into the household to pay back the debt. Even when singly owned, it is easy to overspend beyond one's means and reach a position of financial instability from which there seems no escape.
