A welcoming home for those others turn away

More than 8 million people - one in four of the adult population - have had difficulty obtaining credit from high street banks and other lenders, according to market analyst Datamonitor.

They may have had past debt problems or have county court judgments registered against them. Others are turned away after living overseas and not building up a credit history in the UK. Or it may simply be a case of changing addresses too often or applying for credit a lot. But just because one high street bank or building society rejects you does not mean they all will. If you have two CCJs (they stay on the credit record for six years) registered against you but neither is big and both have been settled, you may be able to get a mortgage from a mainstream lender such as Abbey National, Halifax, HSBC, Nationwide, Woolwich or Yorkshire.

Failing that you could go to one specialising in 'non-status' lending. Non-status lenders have had a bad press in the past for high interest rates and harsh redemption penalties but the sector appears to have undergone an image change of late. Market leader Kensington Mortgage Company says most of its customers are now in the ABC1 category and most sub-prime lenders are members of the Council of Mortgage lenders.

Non-status lender First National Mortgage Company, an Abbey National subsidiary, takes all comers. It says it rewards good payments by dropping interest rates by 0.5 per cent per year. Rates start off at 1.25 per cent above the SVR (standard variable rate) of 7.74 per cent for a loan that is 60 per cent of the value of the property.

Chelsea Building Society's Prospect mortgage is for those who have experienced some kind of financial diffi culty. The mortgage has four 'tiers' geared towards different levels of indebtedness. The product has the advantage of reverting to the SVR provided you keep up with payments for two years. Another advantage is that should you want to switch mortgages in the future it is easier to do so with a household name such as Chelsea behind you.

Bank of Scotland subsidiary the Mortgage Business charges interest of just 1 per cent above its SVR of 8.65 per cent on its mortgage for the credit-impaired. After a year the Credit Solutions mortgage reverts to the SVR provided the customer maintains a perfect payment record. To find out more ring 0845 300 1604.