Looking for a re mortgage? Bad credit need not be a problem
If you are interested in a re mortgage, a bad credit rating need not count against you. There are now a number of lenders who will provide loans even if you have had debt problems in the past.
There are a number of reasons why you may have problems getting a remortgage from some lenders. These include county court judgements (CCJs), mortgage or remortgage arrears, credit card arrears, defaults on loan or high purchase payments, an IVA or a bad credit rating.
In addition, there are now more and more lenders who provide re mortgages for the self employed and those who do not have a regular income.
A number of years ago anyone looking for a loan who had a bad credit rating would be flatly refused a mortgage or re mortgage by all parties. However, the landscape has shifted significantly in the past few years and there are now a number of options on the remortgage market.
While the sub-prime mortgage and remortgage crisis in the United States has made lenders more cautious, there should still be plenty of remortgage products available.
However, when looking for a re mortgage, bad credit will limit your options and the products on offer will be more expensive. In the past, brokers set up bad credit remortgages which charged extortionate interest rates and very heavy penalties.
Thankfully, the situation has improved dramatically in recent years. One of the best approaches is to look for a credit repair deal. You will take out a mortgage or remortgage that charges higher interest rates. However, once you keep up with repayments for three years your credit rating will be repaired and you will be free to shop around for a standard remortgage, which should be much cheaper.
The re mortgage bad credit market is much more limited than the standard re-mortgage market with far fewer lenders offering products. You can research and compare the various bad credit options yourself. However, the majority of bad credit remortgages are arranged through a broker.
This is a specialist area and you should take great care in selecting your bad credit remortgage broker. Talk to family, friends and colleagues to see if anyone can recommend a good broker. Also, search the internet for reviews and recommendations.
You should try to find a bad credit remortgage broker who will approach a number of lenders to find the best product to suit your personal circumstances. When you are offered a remortgage, be wary of deceiving introductory interest rates that rise sharply after a year or two. Make sure you are getting a product that is competitive in the long run.
If you are having debt problems, a bad credit remortgage may also be beneficial because it could allow you to consolidate all your debts. The interest you pay on your remortgage will be far lower than, say, a credit card or personal loan, and you have the convenience of having to make just one monthly repayment.
So if you want a re mortgage, bad credit may not be a problem. While it may not be as cheap as a standard re mortgage loan, it could still save you money.
