Can I remortgage with bad credit?

Posted by

“Can I remortgage with bad credit?”, is a question we get asked on a daily basis.

As an Independent Whole of Market Broker that specialises in bad credit and complex cases we have a very high level of success for our customers so we thought we would put this guide to getting a Bad Credit Remortgage together, to offer some insight.

In this post we will cover the following

  1. What is a Bad Credit Remortgage?
  2. Can I remortgage with bad credit?
  3. What type of Bad Credit will / wont be considered
  4. What Can I Expect from a Bad Credit Re/Mortgage Application?
  5. What rate of interest can I expect?
  6. Real Examples of Bad Credit Remortgages

From the outset it is important to remember that as part of this post we will use real word examples and scenarios from actual cases we have submitted.

However, each mortgage application is judged on its on merits, at the time of application and as everyone’s circumstances will vary, but more so, the bad credit mortgage market also changes daily.

Lending criteria and applicable interest rates outlined should only be used as an example.

Rest assured, because we are a Whole of Market broker we will search the whole UK market on your behalf to find the best product for your circumstance.

1. What is a Bad Credit Remortgage?

Bad Credit Remortgage - How to remortgage with bad credit

As you might expect a ‘bad credit remortgage’ is just as it sounds, a re-mortgage were the applicant/s have some degree of adverse (i.e. bad) credit.

Typically a ‘bad credit mortgage’ is the term more commonly associated with purchasing your home. A ‘re-mortgage’ is the term used for more often than not, staying in the same property but paying off the old mortgage with a new one.

Remortgages include the most common reasons of Mortgage Lender Switching to get a better interest rate and Equity Release to increase the amount of mortgage by taking out some of the equity in your home.

Other examples of were a remortgage can come in useful are in the event of buying out a former partner in the event of divorce or relationship breakdown, giving some options to Mortgage Prisoners, or perhaps to facilitate an equity release for debt consolidation or other life events, such as home improvement. Even converting your homeowner mortgage to a Buy-to-let loan to rent out your current home and moving home is another example.

*Whatever the reasons for your remortgage we can find the right product and the right lender for your needs and circumstances by accessing the whole UK mortgage market.

2. Can I remortgage with bad credit?

Can I remortgage with bad credit?

In short, yes you can get a remortgage with bad credit. As with any type of mortgage it will depend on your circumstances. But rest assured, as a complex case specialist we have gotten customers offers from lenders when they have had some very very severe adverse credit.

*You can just pick up the phone and call for a no obligation consultation and if yours is one of the rare instances that there isnt a deal in the current market for you, we wont waste your time and we will give you advice on how you can turn things around in the near future, to a point when you can get you an offer.

3. What type of Bad Credit will / wont be considered?

There are many forms of adverse or negative credit that will affect your application.

These can range from the lower end such as a Low credit score, missed credit card payments to Mortgage Arrears or Defaults, to the more severe County Court Judgements (CCJs), Individual Voluntary Arrangements (IVAs) Debt Management Plans (DMPs), Bankruptcy and even Repossession.

Being a whole of market broker we are in a somewhat privileged position of being able to review your application and your bad credit and research if there are any lenders that would be receptive to your case today.

The good news is that we have been able to place mortgages for people whom have had all of the above.

Timing plays a big part and some lenders will be receptive to the how’s and why’s of the bad credit, such as redundancy or divorce, which can wreak havoc on your finances.

However, whilst we are specialists in bad credit mortgages and remortgages and we can place a mortgage for someone who has DMP’s or only recently discharged from a bankruptcy, if you had your home repossessed a few days ago and were only just declared bankrupt, whilst there is likely no lender out there for your circumstances now, we can give you the advice on how to move forward as quickly as possible, to get back on the property ladder, at a later date.

4. What Can I Expect from a Bad Credit Re/Mortgage Application?

Just like any other mortgage application, a bad credit application looks at income, expenditure and affordability plus the property in question and how much equity or deposit are involved. There is no difference in this regard with a standard application with good credit.

The only difference with a bad credit application is that whilst a high street lender will likely not even entertain such an application, we (as a Whole of Market Broker) will talk through how the bad credit happened so that we can approach a lender that we feel would be receptive to your circumstances.

You may have experience it yourself but with bad credit and applying for a mortgage from a high street bank, the phrase ‘computer says no’ springs to mind.

The biggest difference in using a broker such as ourselves as opposed to going it alone, or using a broker that doesn’t have experience in bad credit is that we do this day in, day out, so we can offer you the advice you need and a hassle free application process.

5. What rate of interest can I expect?

Why not use our Bad Credit Mortgage Calculator tool to see for yourself.

As we said at the beginning, the rates are indicative and based on moderate levels of adverse credit and for illustrative purposes only.

6. Real Example of a Bad Credit Remortgage

It pays to speak to a specialist bad credit mortgage broker such as ourselves as in the space of two years a typical returning customer (and one we used for this example) can go from a bad credit mortgage of 5.5% down to a remortgage of 2.5%, which offers significant interest savings and lower monthly repayments.

The customer customer in question above, who got the 3% interest rate saving after 24 months had some adverse credit issues prior to the original application and included a relatively high value default of over £1,500.

We managed to help him after a previous broker had said they were unable to help. At the time the rate was on the high side of around 5.5% with a specialist bad credit lender, which was fixed for a 2 year period.

Once those 2 years were up, the customer came back to us to help him with his remortgage.

Because the bad credit issues were now another 2 years old and he had kept his credit file clean since which when you factor in that he now also had 2 years evidence of mortgage payments, we were able to get him a remortgage on the high street at a rate of around 2.5%.

The remortgage also included him increasing the balance of his mortgage in order to build an extension.

As you can see, In the space of 2 years, someone had gone from needing a specialist bad credit lender to a high street lender and had more than halved the rate of interest he was paying on his mortgages.

If you would like some advice on getting a bad credit remortgage, or normal home buyer mortgage for that matter, feel free to get in touch.