How does bad credit impact remortgaging?
Having bad credit shows lenders you have struggled with your finances in the past. This means they may look at you as a higher risk. Due to this, lenders may be less willing to lend to you or may offer you less favourable terms, such as higher interest rates.
A number of things can cause poor credit. These could include: missed payments, defaults, or CCJs (County Court Judgements). All of these can negatively impact your credit score and reduce your chances of being accepted for a remortgage.
However, there are specialist lenders who can help people in these circumstances. These lenders might be willing to lend to you, but their interest rates could be higher.
We’re a specialist mortgage broker, who aims to help clients who are having problems getting accepted elsewhere. Therefore, if you have been declined by the high street, we may be able to help you.
Can I remortgage with bad credit?
Remortgaging with bad credit is possible, however it might be more difficult. That said, there are still options available. It’s important to do your research carefully to find these solutions.
If you are in this situation, it could be worth taking steps to try and improve your credit score before applying for a remortgage. Here are some tips:
Check your credit report – Become familiar with your credit report. It is crucial to verify that all the information is precise and current. Inaccuracies may exist, which can hinder your ability to remortgage. In such a situation, contacting a credit reference agency to correct the errors is recommended. This may enhance your credit score and increase your chances of acceptance.
Register on the electoral roll – This means you are eligible to vote in your area. It can help lenders verify your identity and your address. This can help boost your chances of securing a remortgage.
Pay off outstanding debts – Paying off your outstanding debts is one of the best ways to improve your credit score. Plus, paying off debts may also free up cash that you can use to meet other goals.
Avoid closing old credit accounts – Keeping your old credit accounts open, even if you are not using them, can be a good way of building credit. The length of your credit history is one of the factors that determines your credit score, and by closing your accounts, you may shorten this.
Limit the number of credit applications you make - Making multiple credit applications in a short span of time can have a negative impact on your credit score. Therefore, it is sensible to apply for credit only when you require it.
If you're having financial problems, it's a good idea to reach out to your current creditors for help. They may be able to offer support or arrange alternative repayment plans. For extra support, you could also contact MoneyHelper or Citizens Advice Bureau (CAB) who offer free advice.
Why would I need to remortgage?
There are many reasons why you might consider remortgaging your home.
One of the most common reasons is when your current fixed-rate mortgage is coming to an end. When this happens, your mortgage could be at risk of becoming more expensive if you are moved on to the lender’s standard variable rate mortgage. By remortgaging, you may be able to avoid this. If you’d like to know more about fixed rates, our guide, ‘Should I lock in to a fixed rate mortgage’, may be helpful.
Another reason you might remortgage is to release equity from your home for purposes such as home improvements or paying off debts. To do this, you can ask your current or new lender to increase your mortgage by the amount of equity you want to access. For example, if you need £20,000 you could increase your mortgage by an extra £20,000 to do this. However, this means your monthly payments may go up and you will have more debt.
Finally, you might remortgage to try and save money on your monthly mortgage payments. This is done by finding a better mortgage deal with a lower interest rate. Whilst this can be useful, it’s important to be aware that some lenders may charge an early repayment fee if you are remortgaging early. This can be a hefty charge, so it’s important to weigh up your options carefully before you decide.
It is important to carefully consider all of your options before remortgaging. You may also want to consider seeking the advice of a mortgage broker or financial advisor.
How do I enquire?
Call us for FREE on 0800 032 4646 or enquire using the form below.
Don't forget – making an enquiry will not affect your credit rating in any way!
How do I go about remortgaging my property with bad credit?
Before you start looking to remortgage your property, it’s worth thinking about whether to go directly to a lender or use a mortgage broker.
If you’ve found a suitable product, you may want to go directly to the lender. However, if you’re unsure about what options are open to you, it could be worth getting the help of a specialist mortgage broker. Using a broker may however incur extra fees.
To apply with our team of experts, here are the key steps you will need to take:
- Make an enquiry– Call us on 0800 032 4646 or enquire through our online form above and we will call you.
- We’ll search for a solution– Using our database, we will try to find a good solution to your unique situation.
- Get your funds– If we can find a good product, we’ll get in touch to talk it through. If you’re happy with the product, we can proceed to the final steps and get your funds sorted.
