Can I remortgage with bad credit?

Updated 23rd September 2020

Can I remortgage with bad credit?

The simple answer is yes, dependent on the situation. This is where the use of a bad credit mortgage broker is especially important for the following reasons.

1) Interest rates for bad credit mortgages are typically higher (due to being deemed higher risk), so choosing the right lender is vital to save time and money.

2) Most specialist lenders only accept applications from mortgage brokers, but not all bad credit mortgage brokers have access to the “Whole of the Market”, so it is vital you use a broker who does. All the brokers we work with are whole of market.

Can I remortgage if I have defaults?

Yes, it will come down to how many defaults you have, when they were registered and the amount of the defaults. There are specialist lenders who are set up to provide this sort of mortgage.

Defaults are extremely common, some lenders ignore certain defaults, such as communication and mail orders. The reason is these companies are quick to place the defaults in the first instance.

Can I remortgage if I have CCJ’s?

This is still possible, there are certain factors which will influence the remortgage.

  • Date CCJ was issued
  • Amount of the CCJ
  • Total number of CCJ’s
  • If the CCJ is satisfied.
  • What the CCJ was for

The more historic the CCJ the more options will be available to you. The more equity you have in the property the better your chances of getting the remortgage.

Your mortgage expert will be able to give you the most up to date information. To find out how we can help call us on 0300 124 5655 or complete our quick enquiry form

Can I remortgage if I have a debt management plan (DMP)?

If you are in a debt management plan or have recently completed one, you can still remortgage.

If you are still in a debt management plan, then remortgaging can be a good way to pay off the debts. You can remortgage and keep the debt management plan in place, the lender will use the monthly repayment as a credit commitment for affordability purposes.

If you are currently in a debt management plan you will need to use a specialist lender. Depending on when the debt management plan was, it could be possible to use a high street lender.

Can I remortgage after bankruptcy?

A previous bankruptcy can cause problems when looking to remortgage, most high street lenders will automatically decline you.

There are couple of high street lenders and some specialist lenders that would be willing to accept this type of application.

Even if the bankruptcy isn’t showing on your credit file, you must always declare it to the mortgage lender.

The mortgage experts we work with will be able to advise you the best way forward for your circumstances

Bad credit remortgage steps.

Checking the contents of your credit report. There are 3 main credit agencies, Transunion, Experian and Equifax and each lender uses different credit reference agencies to get their information – some will reference multiple agencies while other lender will rely solely on one. The best advice is to use a multi-agency report such as Check My File that check all 3 reports, the more information your broker has the better. One question we always get asked “Does getting my credit report affect my credit score” – the answer is no; it doesn’t leave any footprint or adversely affect your score.

Broker advice.

The broker will then look at your current outgoings. To do this they will need to know your current mortgage balance and property value, if any additional borrowing is required and what credit commitments are to remain in place after the remortgage. Typical reasons clients look to obtain additional borrowing is for debt consolidation, home improvements, transfer of equity (removing or adding a party to the mortgage), and general capital raising. As a rule of thumb, any legal reason is generally acceptable to lenders, again your bad credit mortgage broker will know the best lender for your circumstances.

Affordability.

Affordability – can you afford the new monthly payments? Each lender has their own affordability model when assessing mortgage affordability and borrowing amounts can vary massively – just because you have been told a mortgage does not meet one lenders affordability, this does not mean you cannot get the required mortgage amount. Some lenders will take 100% of commission and bonus income into account, while others will only use 50% of this income. Likewise, with self-employed and limited company applicants the difference in affordability when looking at latest years accounts vs an average of the last two or three years can massively affect borrowing amounts. A good mortgage broker will know where to look for the best outcome for you, the client.

Your broker will then be able to recommend with confidence the best deal for you. As they are whole of market mortgage specialist you can rest assured it will be the best possible deal for you.

If for any reason a remortgage isn’t possible right away, the brokers we work with will outline a plan and timescale for when it will be. The bad credit brokers we work with will give you a plan of action, including timescales and if needed actions to improve/repair your credit profile.

To check your latest credit report click here.

Speak to a bad credit remortgage advisor.

There are many lenders available ranging from high street to specialist lenders. Most people go to their own bank, get declined or can’t borrow what they need – just because one lender has declined you, don’t give up.

Our mortgage experts will look at each case before deciding which lender is right for you and your individual circumstances. All the mortgage brokers we work with are whole of market and offer unbiased advice. They will have access to all the specialist lenders to really enhance your chances of achieving the mortgage you need.

The expert brokers we work with have experience in dealing with all aspects of bad credit remortgages and importantly using the whole of the market to access the very best deals available.

To find out how we can help call us on 0300 124 5655 or complete our quick enquiry form to speak to a mortgage expert.

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