Finding mortgages for bad credit borrowers
Unlike in the past, there are now a number of mortgages for bad credit borrowers. People can get a bad credit rating for a number of reasons and it counts against them when they apply for any kind of credit, including remortgages.
Most commonly, people have a bad credit rating because of county court judgements (CCJs), mortgage or remortgage arrears, credit card arrears, defaults on loan or high purchase payments, or an IVA or bankruptcy.
While it will still be difficult to get a mortgage or remortgage if you have a bad credit rating, there are options out there. The first thing you should do if you plan to apply for a remortgage or a mortgage is to investigate your own credit rating.
The two biggest credit reference agencies in the UK are Experian and Equifax. One, or both, of these will most likely have detailed information on your credit history. You can apply to see what your credit rating is before you apply for a mortgage or remortgage.
If you do have a bad credit rating, investigate which lenders offer remortgages and mortgages for bad credit rating borrowers. Alternatively, you could find a broker that specialises in bad credit mortgages and remortgages. In fact, the vast majority of remortgages and mortgages for bad credit are arranged through brokers.
Ask friends and family to see if they can recommend a good broker. If not, look for advice on the internet and be sure to choose a regulated bad credit mortgage and remortgage broker.
Also, try to find a bad credit remortgage broker who will approach a number of lenders to find the best product for you. Watch out for deceiving introductory interest rates that may rise sharply after a year or two.
It is very important not to apply for a mortgage or remortgage from a lender who is likely to turn you down. Each refusal will also be noted on your credit rating, damaging it further. Get your broker to advise you on which lenders are most likely to accept your mortgage or remortgage application.
The good news is that there is most likely a lender out there who will offer you a mortgage or remortgage. However, you will pay more than you would on a standard mortgage.
On of the major advantages of mortgages and remortgages for bad credit is that it may give you an opportunity to arrange a credit repair deal. Your adverse credit mortgage or remortgage may charge higher standard variable interest or fixed interest rates, but it will allow you to repair your credit rating if you keep up with repayments for three years. If you achieve this, you will then be in a position to apply for a normal remortgage at much cheaper rates.
Whether you approach the banks or building societies for remortgages and mortgages for bad credit, or you look for an online remortgage, there is much more choice on the market today than there was a few years ago.
