Bad Credit Mortgage

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Bad Credit Mortgage is taken by the borrowers when they have bad rating for credit mortgage. Bad Credit Mortgage is taken by the borrowers when they have suffered debt problems, or have defaulted on a mortgage, or when they have filed for bankruptcy.

Bad Mortgage Credit has increased all across the world in the last few years. Nowadays, many building societies and banks give Bad Credit Mortgage and they also offer a wide range of capped, trackers, discounts, flexible, and fixed Bad Credit Mortgages. In Bad Credit Mortgage, the borrower has to pay a very high rate of interest in comparison to what they would pay in a regular mortgage.

In Bad Credit Mortgage, borrowers have to sometimes pay a pre-payment penalty. These pre-payment penalties last from around 6 months to 2-3 years. This pre-payment penalty means that the borrowers have to pay large amounts of interest for the first few months or years and then they repay the loan. The type of Bad Credit Mortgage also helps the borrowers to improve their finances and credit over a period of time. This is because when the borrowers have maintained their mortgage payments for a long period of time, they are able to establish new and good credit ratings. This helps borrowers return to regular mortgage where they have to pay a lower rate of interest.

The advantages of Bad Credit Mortgage are that it allows many people to get home loans and thus enables them to own their dream homes which they would otherwise not be able to get. Many banks and building societies are now offering Bad Credit Mortgage and as a result of increased competition, the rates of interest have come down considerably and thus have benefited the borrowers. A wide range of Bad Credit Mortgage is available for the borrowers and this too has proved beneficial for them for they can choose from a wide selection.

The disadvantages of Bad Credit Mortgage are that they are more expensive then the regular mortgage for the borrowers has to pay a higher rate of interest and thus puts more pressure on the borrowers. Also it is possible to get Bad Credit Mortgage mainly through a mortgage broker who charges its fees and thus makes it more expensive for the borrowers to get Bad Credit Mortgage.

Last Updated on 5/26/2011