Bad Credit Remortgage

Can you remortgage with bad credit?

Yes, we have access to lenders that cater for applicants with poor credit and could facilitate a remortgage. We would place you with the most suitable lender for your individual circumstances and the severity of your adverse credit.

Lenders could cater for a range of adverse events including County Court Judgements (CCJs), defaults, even potentially a historic bankruptcy. Reach out to a good broker – we could certainly help you with that.

How can I remortgage with bad credit? What’s the process?

The first step would be to get in touch with an advisor to complete what we call an initial mortgage fact find. We would request details around yourself, your income, your expenditure, your credit history and your future objectives.

We would ask you for some initial documents to research the options and provide accurate advice. Those documents would include ID, proof of address and proof of income.

If defaults, CCJs or unsecured arrears are identified on the fact find, we would normally request a copy of your credit file, to ascertain the dates these events were registered, whether or not they’re satisfied, the balances and so on.

Can you be declined a remortgage?

It is possible. Lenders assess remortgage applications based on their own policies and criteria. They could reject an applicant due to credit issues, but it could also be lack of affordability, or the property itself being unsuitable security – or other risk elements.

As an advisor, we would secure you a Decision in Principle in advance. We would run a credit check, typically a soft check, but not always. As long as you’re accepted in principle, we would submit an application for you. That gives you the chance of acceptance and the least likelihood of a decline.

Can I get a remortgage after bankruptcy or with a CCJ, IVA or default?

The short answer is yes. With a bankruptcy, it would depend how long ago this was and how much it was for. The same would go for a CCJ, Individual Voluntary Arrangement (IVA) or a default.

An adverse event like a default that was registered five or six years ago would usually be seen more favourably than one registered in the last three months, for example.

Can you remortgage with a Debt Management Plan?

It is possible. Limited lenders could consider this and it does greatly depend on your overall circumstances. Typically with a Debt Management Plan (DMP), lenders look at whether it is still active.

If you’ve been paying that plan and it’s all up to date, some lenders can consider it, but most would want to see that that particular plan is now satisfied and cleared for a set period of time.

Another factor around DMPs is that the Loan to Value might be restricted. This varies from lender to lender. They might require more equity in the property compared to somebody with no DMP in place.

But in the event another lender isn’t able to consider your application, it’s normally possible to complete a product transfer with your current lender. That would either be through a broker or direct with the lender.

What deals and rates are available if you are remortgaging with bad credit?

Interest rates available will depend on your overall circumstances, including credit history. You would expect typically to pay a higher interest rate with adverse credit in the background, of course.

The more recent and the more serious the adverse event, we normally expect a greater increase. Minor adverse events such as a couple of missed payments on a credit card will result in a lower rate than a CCJ for a high balance registered against you.

Are there many bad credit remortgage lenders?

We have access to over 100 lenders here at Asset Harbour Mortgages and Protection Limited, and many of these cater for elements of adverse credit. Those would include CCJs, defaults, secured and unsecured arrears and even historic bankruptcy.

It’s a case of assessing your full circumstances and obtaining a copy of the credit file. We could then find a lender where you meet the criteria and hopefully pass credit scoring.

Is it better to improve my credit rating before remortgaging?

It would depend on the time remaining on your current mortgage product. If, for example, you have six months until the mortgage ends and some elements of the credit file are likely to improve, there might be value in waiting.

However, if the mortgage is ending imminently, then falling onto the lender standard variable rate (which is typically far higher) would need to be factored into the decision making process. In this instance it may be more suitable to remortgage now rather than waiting.

How do I improve my credit score before remortgaging?

If there’s sufficient time, even small changes such as adding oneself to the electoral roll could increase your credit score. That could even increase the score overnight. Reducing any unsecured debt may have a positive impact as well, as it reduces the overall indebtedness and lowers your debt-to-income ratio. Both are things that lenders look at.

Clearing any current arrears is also beneficial to credit scores. So if you recently had a late or missed payment on a credit card, making sure that’s up to date before you apply will have a beneficial impact.

Should there be adverse events such as defaults or any CCJs which are unsatisfied, settling these will have a really positive long-term impact on your credit file compared to leaving them outstanding.

How do I apply for a remortgage with bad credit?

The application process is more or less the same. There might be some additional documents or checks needed, compared with an application with no adverse in the background.

The first step would be to speak to an advisor. We’ll advise you on the possible options for your circumstances and guide you through the whole process from start to finish.

What else do we need to know about a bad credit remortgage?

When entering the remortgage process with adverse credit in the background, try not to exacerbate the issue. Avoid taking any additional credit just before the application.

Any very recent late or missed payments, or new commitments might harm your eligibility. So just be conscious before you apply for a remortgage, that it’s important not to make the credit file any worse.

Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £99 to £549, and this will be discussed and agreed with you at the earliest opportunity.

Asset Harbour Mortgage & Protection Ltd trading as Asset Harbour Mortgage & Protection are an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.