Remortgage with Bad Credit

Everybody with a bank account will have a credit file. This file shows your credit history, a record of how well you have managed to repay any credit you have owed in the past. Along with various other factors, this builds up what is called your credit score.

Once you have bad credit, it can be incredibly difficult to mortgage or remortgage, as a mortgage lender may be less likely to lend to someone who could be considered unreliable.

The best way to know if you have bad credit, is to check your credit file by obtaining an up-to-date credit report. We would recommend reviewing various platforms to check for consistent data, and because each platform may score slightly differently.

If you are aware of any defaults, CCJ's or IVA's against your name, or have declared bankrupt at any point in the past, this will also indicate that you have bad credit.

Once you know you have a poor credit score, please make sure not to apply for a mortgage without the help of an expert in the field. Some lenders may perform a "hard search" which is an in-depth credit search that leaves a footprint on your credit file.

Too many hard searches can seriously harm your chances of getting a mortgage. Speaking to a trusted mortgage broker will give you the chance to have your circumstances matched up against a lender who perhaps won't decline you, without your credit score being affected.

Though it operates on a case-by-case basis, yes , you should still be able to remortgage with bad credit on your home.

That being said, if you have had financial difficulty after taking out your original mortgage, it may be more of a benefit for you to remain with your existing mortgage lender.

A trusted and experienced mortgage broker will be able to help you run through the most appropriate options for you to take as an applicant who is looking to remortgage with bad credit.

You may find that after much trying to do so, you have unfortunately run out of remortgage options and have found that you are, at this stage, unable to remortgage your home for your desired purpose.

Whilst you may not be able to get a remortgage at this current moment in time, there may be some additional steps that you are able to take in order to improve your credit rating, hopefully giving you more remortgage options later down the line when this becomes an option for you again.

When you remortgage, you are switching not only your deal, but your mortgage lender too. Because of this, much like when you first took out a mortgage, yes a new lender will want to assess you via your current credit rating.

Some mortgage lenders will opt to use what is called a “soft” credit search when they go over your case to grant an Agreement in Principle. These types of credit searches will not affect your credit score.

You have the option of being able to ask your current lender for a further advance if this is something you would like to achieve. If that is not possible, you may need to look at remortgaging to a different lender.

If that in turn is not possible then a final option could be to leave your current mortgage in place and take out a second charge mortgage (secured loan) with another provider, though it is important to know that higher interest rates apply to these products.

Defaults and CCJ’s stay on your credit file for 6 years, though if you feel these have been registered incorrectly then you should approach the provider to see if they can remove them from your credit file.

If the adverse credit was registered against you very recently, then you will find it incredibly difficult to obtain a mortgage in your name.

IVA mortgages are incredibly difficult usually and you'll typically be seen as high risk to a mortgage lender, though they're not 100% impossible.

Furthermore, a mortgage lender may be more lenient to an existing homeowner looking to remortgage with an IVA, than they would be to a first time buyer.

You may be considered for a mortgage with an IVA to your name if you have been keeping up with your repayments on it. A mortgage lender will likely want to see proof for the last year or two, evidencing that you have been able to do this.

It can be quite the challenge trying to remortgage if you have declared for bankruptcy. Whilst not impossible, it is entirely likely you will be straight up refused by a mortgage lender.

This is because bankruptcy is essentially a reset on your credit file and you'll need to wait until you have been discharged from the point of your declaration (typically 12 months), before you can start rebuilding your credit history once again.

You will absolutely need the help of a specialist mortgage advisor in order to navigate these tricky waters. Definitely avoid rushing into any decisions yourself if you are in a situation like this.

If you are an existing homeowner and are failing to repay your monthly mortgage balance, then yes you could be at a risk of having your property repossessed by the mortgage lender you have borrowed from.

There are specific rules in place in which a mortgage lender must provide you with clear information in regard to your debts and give you plenty of opportunity to pay back the debt you owe.

Contrary to popular belief, a mortgage lender will not want to repossess a home, as this can more often than not, leave them out of pocket. This is always a last-resort outcome that they take no pride in, only occurring once you have been taken to court.

If you are failing to meet your payments, you should contact your mortgage lender directly to try and come to an agreement that both sides can benefit from. More often than not, a mortgage lender will be more than happy to work together on a solution.