If you’re considering remortgaging, it’s important to have an idea of whether you’ll be accepted before your lender runs a hard credit check. A remortgage is the act of paying off one existing mortgage loan with the proceeds of a new mortgage – often with a better rate.
You may be under the impression that you can’t remortgage your home if you have a bad credit history – but this may not be the case.
Read on to learn more about the remortgaging process, and to find out whether it is possible to remortgage your home with a less than perfect credit history.
There are many reasons why you may consider remortgaging. Most people will remortgage as their current mortgage term is ending – if you don’t take action before your term comes to an end, you could be left with your lender’s SVR (standard variable rate) – which is often higher than the competition.
You may also want to remortgage your home to get more control over your finances. Remortgaging your home can be a good way of consolidating debts. This can help you pay off your debris quicker due to the lower interest rates on your other debts.
Remortgaging can also be a way to raise the funds for home renovations and improvements such as repairs or an extension. Likewise, if you want to make a big purchase such as a new car, remortgaging can bring you closer to affording it. You may also want to remortgage if you plan on purchasing another property.
Can I Remortgage If I Have Bad Credit?
If you’re considering remortgaging but you’re worried about the state of your credit report, then you’ll be glad to know that you can remortgage with bad credit. However, it may be more difficult to find a quality deal – as if you have a poor credit history, you won’t usually be offered the same rates as somebody with a more appealing credit history. If you have missed payments, have previous debts, or have a CCJ, then you should expect the interest rates available to you to be higher.
However, with a quality mortgage advisor/ broker, it will be easier to find the best bad credit mortgage deals despite having a poor credit report – in fact, some brokers even specialise in bad credit mortgages.
At LTC Mortgages, we are remortgage experts and have relationships with a network of lenders and can find you the best mortgage deals. Contact us today to learn more about how we can help you throughout the remortgage process.
If you plan on remortgaging your home but have a history of late or missed payments, it’s important to note that the mortgage will be taken out against your home. This means that your home could be repossessed if you don’t meet the regular payments, so don’t take remortgaging lightly.
What Counts as Bad Credit?
Bad credit doesn’t always refer to your score – lenders will look at your credit report as opposed to just your credit score. That being said, a credit score that falls under 579 is considered poor, and you may not receive the best mortgage rates if your credit score is below 670.
A bad credit report reflects your history with credit – it suggests that you post more of a risk when borrowing money. Lenders will check your credit history to get an insight into your creditworthiness – if you’ve failed to repay debts in the past, then lenders may be more reluctant to lend you the funds.
There are many items that can contribute to a poor credit history – for example, a low credit score alone, bankruptcy, repossession, CCJs (County Court judgements), late payments, arrears, and defaults.
The good news is that items will drop off your credit report after six years – however, there are ways that you can build your credit score if you want to take advantage of the best mortgage rates available. Choosing an expert mortgage broker can increase the chances of finding the best rates despite having a poor credit history – so contact us today to get the ball rolling.
Liam Coker is a highly skilled mortgage and protection specialist who delivers excellent customer service. His knowledge of the mortgage industry is key to finding the correct solution for people’s specific needs.