Choosing a bad credit mortgage broker

Bad credit comes in many varieties. If you have had mortgage or loan arrears, had a CCJ issued against you or had missed credit card payments then you have bad credit. Having bad credit means that you may struggle to get a mortgage from a high street or conventional mortgage lender. Bad credit shows up on your credit file. Your credit file will be searched by anyone that you approach credit for such as credit card companies, morgage lender, loan company, secured lender. These lenders can then see your previous credit problems. Not knowing what is actually stated on your credit file makes this problem even worse as you do not exactly know the depth of the problem.So, you have bad credit but you still need a mortgage, how do you choose a good, bad credit mortgage broker?Mortgage brokers come in various flavours these days. Some may only deal with a few lenders, some will be whole of market which means they deal with all lenders and some will be true independent mortgage brokers. Independent mortgage brokers have to do 2 things; they have to cover the whole market and they have to offer you a fee only option when discussing their payment terms. Do not be put off by this. Even though an independent mortgage broker has to offer this option, they will often still be able to give advice on a commission only basis or commission plus a client fee.The most important thing to establish when searching for a bad credit mortgage broker is how much experience they have in dealing with these types of mortgages. Some brokers seem to be experts at everything but this is rarely true. Ask your mortgage broker how much of their business is bad credit, ask them what types of clients and what types of bad credit they normally deal with. Perhaps one of the worst bad credit problems is bankruptcy. Discharged bankrupt mortgages are a difficult area but their are mortgage brokers who are highly skilled at helping clients in these situations.So once you have established that your mortgage broker is experienced with bad credit mortgages you need to discuss money. More importantly, you need to ask how much YOU will have to pay for their help and advice. Some mortgage brokers will receive and keep commission from the mortgage lender and they will then charge you an extra 2-3 of the mortgage amount. This is a large amount of money and is excessive. They know that you have few places to go for your bad credit mortgage so they hike up the fees.However, there are still good brokers out there who want to do the best for their clients and don't take you to the cleaners at the same time. If your mortgage broker is working on a commission basis an additional fee of up to 1 of the loan should be acceptable. Some brokers will simply offer a fixed fee of say £500. It takes no longer to work on a £100,000 mortgage than it does on a £200,000 so why pay twice the price when the fee is a percentage of the loan amount?When you have decided upon a mortgage broker then they will need to ask detailed questions about your credit problems. Some bad credit mortgage brokers will ask you to obtain a copy of your credit file just to be sure of the facts. These are all good points and the broker is on your side. They need to know all of the details so they can get the best deal. Once the mortgage is aplied for your broker should help with admin and assist with any problems along the way until the loan completes.Many brokers now will contact their mortgage clients in the future. This may be when any early repayment charges have ceased on your mortgage. Depending on your circumstances, it may then be possible to remortgage away from a bad credit lender onto a prime scheme which will be a lot cheaper and save you money.

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