Taking a mortgage loan can be difficult for people with bad credit, no matter what caused it – late payments in the past, county court judgement or simply not having any previous credit history or being self-employed. But difficult does not necessarily mean impossible, and bad credit mortgages, sometimes referred to as impaired or sub-prime mortgages are still available in the UK, although their market has shrinked lately. The main difference from a standard mortgage is a much higher interest rate and a bigger deposit to secure a bad credit mortgage loan.

As with a standard home mortgage loan, don’t concentrate exclusively on the interest rate but look out for the total mortgage cost, consisting of the borrowed sum, the interest rate and the additional fees, such as broker fees, and arrangement fees. Mortgage loans for people with bad credit might also have stricter payment conditions and less or more costly flexibility.

The best thing to do is to contact a mortgage broker (licenced by the UK Financial Services Authority) who could make requirements on your behalf and find the best lender for a particular financial situation, although making your own research can never hurt either. Just remember that all the enquiries you are making leave traces on your already not-so-brilliant credit rating and in order to avoid this, while asking for quotes, specify that it’s a no-obligation enquiry.

One of the best news here is that if you keep your regular payments over a period of time, thus improving your credit rate, you will be able to eventually re-mortgage on better conditions and renegotiate better interest rates.

But one thing is always important to remember – think twice before taking a bad credit mortgage and if you do, make sure you completely understant all the terms and conditions, attached to it and that you will be able to meet all the payments. Bad credit mortgage loan is a serious commitment and failing to pay it can literally leave you without a roof over your head.