Remortgaging

The answer to this question is indeed yes! You can re-mortgage with bad credit and with 50 years of financial experience, we are expert in doing just that!

Over the years we have helped clients re-mortgage, despite having a poor credit history or a low credit score, defaults, CCJ’s, IVA’s, repossessions, bankruptcy or have been placed on any form of debt management plan.

As an independent mortgage broker, we specialise in the more challenging area of the mortgage market. Our expertise in bankruptcy and insolvency proceedings including IVA and Fast Track Voluntary Arrangements, have resulted in us successfully getting mortgages for hundreds of clients with bad credit. We specialise in mortgages for discharged bankrupts, bad credit mortgages and re-mortgaging with bad credit.

There are a number of reasons why you may need to re-mortgage. Some instances include; to consolidate debt, to take advantage of a more competitive rate, to raise capital to purchase something, such as a second property, car or wedding, to buy out an ex-partner after a marital split or to raise money to invest (Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage).

Going to a high street bank isn’t an option in these situations. They will be quick to run a credit check on you with no doubt at all that you will be declined, yet this credit check will have a negative effect on your already poor credit score so this needs to be avoided at all costs.

Using an independent mortgage broker is to your advantage here. We know specialist lenders who will look at individual circumstances and the reasons behind the poor credit or bankruptcy before making a decision, rather than a standard points scored on an automated system.

What you should also consider, ‘Is a re-mortgage my only option if I wish to raise funds for a given purpose?’ Thankfully no it is not. If your current mortgage is with a high street lender on standard lending terms, arranged before you got into financial difficulties, re-mortgaging with another lender on terms that reflect your current bad credit profile, may not be the best option, and you may also have an exit penalty to pay. A secured loan on the property maybe a far better option, as you will only pay the increased terms on the additional borrowing, not on the whole of the mortgage.

The underwriting guidelines for second charge lending appears to be far more flexible than for a normal residential mortgage, and the process is very quick, allowing you to raise funds within a two to three week window, to address your financial problems. Going forward, once you have repaired your credit issues, you will have the option in about 12 months time, of either taking out the loan with a new product on improved terms, or a remortgage to consolidate all of your borrowing

Apart from your credibility, and the proven ability to service the debt, one of the major factors that will affect the decision to lend or not, is the loan to value (LTV ). The more equity that you have in your property, the better. (the open market value minus any secured loans or mortgages ). Lenders feel far more comfortable with a large chunk of equity in the property, which gives them the comfort factor that should things go wrong in the future, they are protected and should get their money back. Nearly all of the Specialist lenders will not lend above 85% LTV, which gives you an indication of the attitude to risk. You will also note that with a low loan to value, the terms of the product are always more attractive.

Affordability is always taken into consideration by lenders, who have to be comfortable that you can afford the repayments. Gone are the days when lenders based the amount that you can borrow on X times your income. You will normally be asked to provide your last three months bank statements, which tend to reflect your current lifestyle, so it would be a very good idea to look at your spending three months before you want to apply for a mortgage, so we paint the best picture.

We are here to help and advise you, and we will look at all of your options and discuss them with you, whether it is a re-mortgage or a secured loan, and when you may be able to look at other options in the future.