Compare The Options Available to Remortgages with Bad Credit

Important to know

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. You may have to pay an early repayment charge to your existing lender when you remortgage.

Even if your credit is not perfect, it’s still possible to remortgage. The amount of lenders available may be limited depending on the severity of the bad credit history; in other words, more complex issues mean fewer potential lenders. For this reason, ensuring you find the right lender for your individual situation can make all the difference between being approved or rejected.

If you want to remortgage but have a less than ideal credit history, specialist lenders may be the way to go. These subprime loan providers are normally more lenient and accommodating when it comes to your borrowing past compared with mainstream banks. However, bear in mind that no specific number is an assurance for approval; each lender evaluates credit scores differently so there’s no such thing as an optimal rate which guarantees acceptance or a universally bad one that means rejection all-together.

A mortgage broker with expertise in bad credit mortgages can provide you with unparalleled access to bargains from specialist lenders, many of which won’t be accessible online or at local banks.

Please remember that a mortgage is a loan secured against your home. Your home may be repossessed if you do not maintain repayments on your mortgage or any other load secured against it. You may have to pay an early repayment charge to your existing lender when you remortgage.

How are remortgage rates affected?

If you have a less-than-ideal credit score, you are likely to encounter higher interest rates when remortgaging than those with stellar records. Specialist lenders typically do not advertise the exact terms they offer borrowers with poor credit histories since each individual case is unique and requires specific evaluation – thus, prices are usually discussed on an individual basis.

For instance, not having any credit history may give you a reduced score on your credit report, but this would have less of an impact on the interest rates available to you than if there was a County Court Judgement (CCJ) or Individual Voluntary Agreement (IVA).

Your credit rating and the equity you have in your home will dictate the interest rate of any mortgage or remortgage deal that is available to you. Unfortunately, if both are adverse it can be difficult to find a suitable remortgage offer.

Would that be difficult with bad credit to remortgage?

Obtaining a mortgage or refinancing is usually dependent on your conditions. Generally, the more severe and recent your credit problems are, the trickier it will be to get accepted. Your level of equity also makes a huge difference in this process. However, if you had an unsatisfied CCJ three years ago that has now been settled, chances are great that getting approved for remortgaging won’t be any harder than someone with an impeccable credit record.

Is there possibility to remortgage without a credit check?

If you’re looking for a loan but have some difficulty accessing lenders, consider approaching your current lender to see if they offer product transfers. This means that no additional credit record checks may be necessary. Additionally, there are specialist lenders out there who utilize alternative methods of verifying creditworthiness – however, the only way to access them is through an experienced mortgage broker.

Will your reasons be taken into consideration with adverse credit?

Indeed, if you possess a bad credit score, it is significantly easier to remortgage in order to take advantage of better conditions than looking for additional funds for home improvements. Additionally, lenders often factor why the person has had poor credit into account when determining eligibility. They can be more understanding with debt incurred from life-altering situations such as health issues rather than someone who was negligent with their borrowing habits on a credit card.

What is the definition of a bad credit score?

A low credit score often pertains to an individual’s history of managing debt. Though the precise numerical value varies between different agencies, it is essential not to fixate on this figure as each agency employs its own scoring system; thus, what one considers high may be considered medium or even low by another.

Mortgage lenders aren’t simply looking at raw numbers when they assess your creditworthiness – rather, it’s a holistic view of how reliable you are as a borrower that really counts. To get an idea of this, the lender will consider factors such as the amount of debt you have accrued, if any payments were made late or missed altogether, whether all debts have been settled and for how long ago these issues occurred. In short: Lenders want to be certain that you will pay off what is owed on your mortgage without fail.

Follow these simple steps to boosting your credit score

There are lenders available for most credit circumstances, however the more recent and drastic your bad credit is, the fewer options you will have to choose from.

To maximize your chances of securing a mortgage, you should work towards improving your credit score. Fortunately, it’s simple to check your credit record online for free and identify any areas of improvement. Most lenders will look at one or more reports from the different agencies before granting a loan; thus, it’s beneficial to know where you stand prior to meeting with the broker.

To help speed up the improvement of your credit score and access more lender opportunities, familiarize yourself with your credit report first before taking these following steps:

  • Ensure that you are included in the electoral register at your current address.
  • If you have a low rating due to limited credit history, then using a credit building card responsibly could be beneficial for you.
  • Before applying for any loans or mortgages, try resolving any existing negative marks on your record where possible.
  • Ensure that all bills are paid punctually – from loan payments to utilities and even credit cards.
  • Ensure that your credit card and overdraft limits are not exceeded, and that no more than 50% of all available credit is used.
  • Verify the accuracy of all information on your credit report—including addresses—and close any unutilized accounts.
  • Moreover, break ties with anyone to whom you have been financially linked in the past by contacting relevant agencies for assistance; this could be a former partner whose bad credit rating may affect yours if still connected.

Fixing inaccuracies on your credit file

It’s essential to audit the data held about you by each credit referencing agency for correctness. If any of this information is incorrect, then you have the right to request a notice of correction be affixed to your file. This way, all inaccuracies can be addressed and amended accordingly.

Are there any options to remortgage with bad credit?

If your credit record isn’t as poor as you first thought, you can research a greater selection of remortgage deals that may suit your needs. However, if this is something still concerning to you, consider consulting with a mortgage consultant who will be able to guide and direct you towards the right lender for your degree of adverse credit.

What to do If you are rejected for a remortgage

Unfortunately, securing a remortgage loan may not always be attainable with even the most experienced bad credit lender. However, there are still two potential solutions available for you:

  • Remortgage by using a product transfer from your current

 If you’ve been reliable with your mortgage payments, even if your credit score isn’t great, most lenders won’t conduct an extra credit search just to switch deals from their range. So don’t let a less-than-perfect history deter you from potentially getting a better deal.

  • Bide your time and wait for the right moment.

Your credit history won’t haunt you forever; all that is required to shed the burden of bad credit are changes in behavior. To your relief, lenders may begin to view borrowers with a CCJ more than two years old favorably. Even better news – any bankruptcy will have disappeared from your record after six years! If the issue isn’t severe, some high street lenders may even adjust their interest rates accordingly. So don’t be discouraged – take courage and reclaim control of your financial future today.

Are you uncertain if your credit is poor?

Uncovering your credit history can be the most straightforward way to assess how you’re faring financially. If you’d like to journey towards a better financial future, learn more about improving your credit score here!

Variety of factors cause a bad credit score

You may have a bad credit history for any number of reasons, some more serious than others. To get an accurate understanding of what will affect your ability to qualify for a mortgage, here’s a list of common circumstances which can all lead to bad credit history – in order from least severe to most:

  • Never having used credit;
  • Making late bill payments or missing them entirely;
  • Having a Default recorded against you; Having a CCJ (County Court Judgement);
  • Being enrolled in either DMP (Debt Management Plan) or IVA (Individual Voluntary Agreement);
  • Experiencing Mortgage arrears currently;
  • Bankruptcy filing;
  • and/or Repossession.

Could it be possible to get the best deal with bad credit?

Negative credit scores are not conducive to loan approvals. Lenders view you as a high-risk borrower when your credit record is poor, so unfortunately obtaining loans may be difficult in such cases.

Could it be worthy to remortgage with bad credit?             

Depending on your personal situation, such as the extent of your credit issues and how much equity you own in a house, it is critical to obtain guidance regarding which lender to select. Multiple rejections from applying with an incorrect type of loan provider for your particular circumstances will only further deteriorate your score.

What does a bad credit score effect on remortgaging?

While different credit reference agencies use distinct scoring systems, lenders are not seeking out a particular baseline score for mortgage or remortgage acceptance. With anything less than an extreme case of poor credit history, you will likely be able to secure a remortgage; however, your options become limited and the interest rates may be higher.

Could there be an issue to remortgage if one of a spouse has bad credit?

When remortgaging jointly, a poor credit score for only one of the people involved can affect both people because all those who own a house together are connected in terms of their credit records. Nonetheless, every lender has its own distinct set of requirements and you may still be able to find an appropriate remortgage package that meets your needs. If either or both individuals have bad credit ratings, it’s recommended that they chat with a broker before opting for any particular lender.

Am I allowed to release equity with bad credit?

If you have a significant amount of equity, then it’s possible to find a lender who will extend your borrowing despite having bad credit. The exact terms and conditions depend on the levels of equity and credit scores involved as well as how much money is being taken out and why. While securing this kind of loan may be more difficult than switching to better rates with an existing lender, if you have sufficient collateral in place there are lenders that might agree to provide finance.

Is release equity with a CCJ possible?

Your ability to secure a lender will depend on the magnitude of equity you possess and how soon/severe your CCJ is. Each bank has its own strategy when it comes to examining the risk associated with having a CCJ; some just consider applications if they have been fulfilled, others look over them after specific amount of time has gone by, while there are those that demand both numerous months or years since it occurred and for the debt to be cleared (paid off).

Overall speaking, more equity paired with an older CCJ means easier access to find a lending partner willing work with you.

Your Mortgage Experts have the knowledge and experience to help and guide you, and advice on the most suitable available options.

Call us today on 02081541111 or drop us an email to

Your Mortgage Experts, London, W9 2HQ

Luca Bertolino

Mortgage Expert

Your Mortgage Experts is led by Luca Bertolino with 20 years experience in financial services and in the property market. Through Luca’s wealth of knowledge and expertise, Your Mortgage Experts have become a trusted adviser that clients have come to rely upon for all their mortgage and protection needs.

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