There are millions of Brits looking for a mortgage today who have credit problems. Maybe they have had bad debts in the recent past, or maybe they have debt now - however they achieved their credit red marks, they may only be eligible for an adverse credit mortgage. An adverse credit mortgage is designed for those who would not be safe enough borrowers for mainstream, prime lending - and as a result they come with a lot of risk. So what are the problems with getting hold of one of these adverse credit mortgage loans? What will stop you, if you are one of the many with debt problems, from being able to finance or refinance your home?

The problems with adverse credit mortgage loans are centred around the recent ‘credit crunch'. In the USA, lots of lenders lost money from defaulting subprime mortgages, and now they are having trouble financing mortgages this side of the Atlantic. Mortgages fund mortgages - lenders get the money to be able to fund an adverse credit mortgage from selling a ‘book' of their other mortgage loans to other lenders -- so loans fund a loan, and it has turned out to be a disastrous move. Unfortunately for those shopping for an adverse credit mortgage, they are at the brunt of the backlash.

Lenders have lost billions of pounds in revenue and have had to close shop when it comes to risky loans. They can't afford to offer subprime loans to those who have had a record of being unable to pay back debt because they need to only have adverse-free books to sell on. Where once a lender would have been sure that they could sell their adverse credit mortgage deals onto another financial institution, now there aren't any buyers and the mortgages become deadweight for the lender. It's a sad situation, and one that means cheap credit is a thing of the past.

There are, of course, some adverse credit mortgage lenders out there still, but they have drastically changed the way they lend. If you want one of their mortgages, you need to be a sure bet that you will not default again. You will also have to prove to the lender that you can handle a much higher mortgage rate than you may have had previously - for an adverse credit mortgage, you may be paying hundreds more a month than you would have a year ago.

If you think you could handle an adverse credit mortgage, talk to your adviser as soon as possible. The lenders who will lend to subprime clients will probably only go through advisers because they know how crucial mortgage advice is today more than ever. Taking out an adverse credit mortgage will not be an easy option. Not only will you have to be sure that you can handle the deal yourself, but a lender will have to be convinced too. But it could be your only way to turn your credit from red to black.