Adverse credit comes in many forms, ranging from bankruptcies and IVA's to CCJ's and Defaults, adverse credit and subsequent poor credit history can also be driven by missed or late payments on credit agreements such as mortgages, mobile phone bills and credit cards. When arranging a mortgage for a borrower with adverse credit it is vital to know the exact dates that the adverse credit has occurred, this information will be vital in placing the mortgage at the most competitive rate and will need to be disclosed to the potential lender.
The lending criteria with the semi-prime and adverse banks currently lending in the UK typically work on a scale basis - the level of adverse credit & when it occurred will dictate the rate, LTV and fee scale available to the borrower. Some prime lenders will allow adverse credit if it is classed as historic - typically this is older than 4 years although it varies across the market. In most cases the maximum LTV is 85% for remortgage and purchase lending, however currently there is very little on offer for first timebuyers with adverse credit and nothing for right to buy borrowers.
Often if the adverse credit is caused by late or missed unsecured credit agreements the mortgage can be placed with a lender that will carry out a credit search but does not credit score - this type of manual underwriting has helped many people get a mortgage after they have been declined by a high street banks automated credit scoring process.