About one in every five individuals is not able to sustain a standard mortgage because of bad credit past or the present poor fiscal condition. Designed especially to help such people are the BAD CREDIT MORTGAGES. These mortgages are for people with a bad credit past. Credit history is based on information retrieved from sources, which include court judgements, bankruptcies and Information provided by financial institutions with which the individuals deal. Bad credit rating results from failure to pay off the outstanding debts or other credit payments mortgage arrears, county court judgements (CCJs) or bankruptcy. There are also other reasons that can result in a bad credit record which include:

1. Heavy medical bills

2. Settlements arising due to Judgements /divorce

3. Multiple credit cards

Bad credit mortgage loan has an interest rate that is fixed for 2-3 years, which is substantially higher that the rate pertaining to a usual 30 year fixed rate loan. This is attributed to the risk the lender has to take. However, after the primary period, the interest rate on a bad credit mortgage is adjusted periodically. There are a few factors that most lenders of bad credit loan mortgages look into, before giving away the loan mortgage to people with bad credit history. These include:

1. Employment history

2. Income stability

3. Current monthly debt

4. Value of the property

The fee charged by lenders on bad credit mortgage loans is also appreciably higher than charged in a standard mortgage. It can range from 1% to 6% of the total loan amount. Normally, a bad credit mortgage is a good option for individuals with bad credit rating it is a great way of cleaning up their credit history. Clean credit reporter-establishes your creditworthiness in the finance market and if the payment of the mortgage is well in time, then you may help yourself with a standard mortgage later.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. She has done her masters in Business Administration and is currently assisting Adverse-Credit-Debt-Consolidation as a finance specialist.finance specialist.
For more information please visit: http://www.your-mortgages.co.uk