Can You Remortgage With Bad Credit?

May 30, 2023

There are many reasons why you may be tempted to remortgage, whether that’s because you want to switch products, release some extra cash from your home or to find a better deal with a different lender. 

However, if you have bad credit, you may be wondering whether remortgaging is even a possibility… and the good news is that yes, you should be able to remortgage even if you do have adverse credit, although you may find the process slightly more complicated. 

But it’s certainly achievable and something worth looking into, so don’t discount yourselves immediately from the outset.

In order to maximise your chances of success, it’s important that you choose the right kind of lender and there are various specialist lenders out there who will approve mortgage applications in these circumstances.

The bigger high street lenders out there are typically more difficult to access, so you may want to consider getting in touch with subprime or specialist mortgage providers.

Something else to bear in mind is that the reasons you give for remortgaging can often make a difference to whether you’ll be approved or not. If, for example, you want to remortgage to raise capital and have bad credit, it’s less likely that you would be approved than if you were looking for a new fixed rate product.

Although having credit problems will likely make it harder for you to access mortgage products because lenders will generally always look at your credit report when making their decision, not all types of bad credit are created equal.

For example, if you have late payments, defaults, CCJs, debt management plans or IVas showing on your report, you are more likely to be accepted than if lenders see you’ve been in mortgage arrears before, if you’ve been declared bankrupt in the past or if your home as been repossessed before.

Other factors that can affect the success of your remortgage application include how long you’ve had the credit issue for, the amount of debt that’s involved and whether or not it’s been repaid. Lenders will take all this information into account when weighing up your lending risk.

If you are accepted for a remortgage, then you should definitely expect to see higher interest rates. There is no standard rate that can be applied for bad credit, because all individual applications are considered on a case by case basis, so it will come down to your individual circumstances that will dictate what rates you’re offered.

However, if you’ve been able to keep your credit profile clean in the two to three years since your most recent issue, you’ll likely find that interest rates are more favourable. And after six years, the marks on your credit report will be wiped, which will ensure you’re able to take advantage of the same rates as everyone else.

Want to find out more about remortgaging for bad credit? Get in touch with us today to see how we can help.

Your home may be repossessed if you do not keep up with your mortgage repayments.

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