What are Adverse Credit Mortgages & Loans

This term is used to describe Credit Problems that have lead to a poor credit history. Mortgage Arrears, CCJ's, Credit defaults and other credit debt repayment problems leads to Adverse Credit rating. When used to describe: Adverse Credit Mortgages or Adverse Credit Loans they mean Mortgages or Loans for people with or who have had Credit Problems and therefore have a Poor Credit Rating.

APR

Stands for Annual Percentage Rate and takes into account the amount of interest you will pay, both annually and over the term of the mortgage. The higher the APR the more you will pay, the lower the APR, the less you pay. This is meant to show the true cost of borrowing and adjusts the notional interest rate to take account of all the initial fees and ongoing costs. This enables you have a clear impression of the actual cost of borrowing throughout the entire mortgage term. Whilst this could be a good way to compare relative deals care should be taken to ensure that the rates being compared have been calculated on the same basis.

Arrangement Fees

These are usually charged by both the broker that you choose and the lender that provides your new mortgage. The lender will charge Fees for setting up your new mortgage, which will cover the cost of any work involved in arranging your mortgage. These fees can usually be added to your mortgage and therefore you will not be asked for these upfront.

Arrears

Mortgage or loan arrears problems is a term used to describe both missed or late mortgage or loan repayments. If you stay in arrears you are likely to end up with a default and a County Court Judgment or CCJ. We have schemes that will still accept applications from people who have had arrears or have CCJ's.

A.S.U Insurance

Accident, sickness and unemployment insurance (sometimes referred to as MPPI- Mortgage Payment Protection Insurance). This is an insurance policy that is taken out by the borrower and protects against the borrower being unable to work for these reasons. The policy will usually pay normal monthly mortgage repayments if the borrower is unable to work due to accident / sickness or unemployment / redundancy. These payments will normally only be made for a limited period of time - typically 6/12/24 months. The terms of these policies and the cost vary considerably from company to company.

A 100 percent mortgage

100% Mortgages cover the full price of the property and possibly a bit extra to cover initial moving fees. This type of mortgage is suitable for someone who is able to afford the repayments on a mortgage but has difficulty in raising capital for the deposit. By covering 100% of the loan the lender is deemed to be exposing itself to greater risk and this will be reflected in the rates. A special fee called a Mortgage Indemnity Guarantee (MIG) may be applicable which could be added to the cost of the mortgage. This fee is charged by some lenders on loans of 90% or more to give them some protection against the borrower defaulting on the loan.

Adjustable rate mortgage

In the US, a mortgage in which the interest rate is liable to change over the term of the loan and which is dependent on influences such as interest rates on US Treasury securities.

Amortization

Amortization - Repayments of the capital element of a loan or mortgage separate from the interest. A term that is more commonly used in the US to describe the regular repayment of interest and principal to pay off a debt at maturity.

 

Back to Glossary Homepage