Those needing a bad credit mortgage are finding that they are having to come up with much higher deposits than in the past. The bad credit mortgage market has been hit hard by the housing crash and lenders are no longer willing to offer 100% loans. In fact, it has become nearly impossible to get a bad credit mortgage in the current climate. Right now, banks are not interested in taking risks on this market and are courting only those that have excellent credit. While some bad credit mortgages are still available, they are dwindling quickly and may not return for at least two to three years, until the markets restabillize.
“Borrowers with small deposits needing a higher income multiple have fallen out of the race,” says Katie Tucker, of Charcol, the mortgage broker. “It is more important than ever to have a spotless credit history and a 10 per cent deposit.”
She continued, “Historically, first-time buyers have needed to multiply their income by more than normal buyers would, to get the loan size they needed, but the two have now converged. This implies that the few first-time buyers who bought were those with high incomes.”
Related reading: Bad Credit Mortgages
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