Over the past few years, an increasing number of mortgage brokers and lenders have began to specialise in offering financial services to people who have unfortunately found themselves with a bad credit history. This is down to the fact that people with a bad credit history have to pay higher interest charges on their borrowings than someone who has a clean credit history.

Unfortunately, people can find themselves with a bad credit history for several reasons: loss of a job, long-term illness and even the breakdown of a marriage can all be cited as reasons for someone having a bad credit rating, and finding financial products to suit can be a difficult task. A recent report claimed that people with bad credit history account for almost 40 percent of the mortgage market, but unfortunately many find that most High-street banks and building societies refuse mortgage applications from people with adverse credit registered against them.

However, if you are one of those people who suffer from a less-than-perfect credit history, it is still possible to obtain a mortgage through a specialist lender. Lenders who operate in this market are commonly known as ‘sub-prime' and the market for offering this type of mortgage has grown considerably, spear-headed mainly by American financial institutions. It might seem strange to think about, but mortgages are, in fact, one of the easiest forms of finance to arrange for people who have bad credit - due to the fact that your home provides a high level of security for the lender. It is important, therefore, to keep up your repayments otherwise the lender could repossess your home.

Specialist mortgage lenders can accept applications from people who have credit arrears, defaults and CCJs - even those that are owned by debt recovery agencies, such as Capquest. In fact, specialist lenders will consider most circumstances and in some cases, mortgages can even be arranged for discharged bankruptcies.

Approximately 1 in 4 mortgages in the UK today is classed as a sub-prime mortgage, but borrowers should be aware that if they keep up their payments on a sub-prime mortgage, they will be well on their way to generating a good credit history with the result that it might be possible to re-mortgage to a lender offering a lower interest rate.

With an ever-growing choice of mortgage options available to those with bad credit, it is important to research the market carefully in order to find the best deals available on bad credit mortgages. There are a number of price comparison websites which can provide information on the different types of financial products available and help to make an informed decision on the right choice of bad credit mortgage to suit your circumstances.