Looking for a remortgage? Adverse credit rating shouldnt stop you
Up to a few years ago a bad credit rating made it virtually impossible to get a mortgage or a remortgage. Adverse credit, however, no longer rules you out from getting a home loan. In this article we look at the remortgage options available for people with bad credit ratings.
British consumers are borrowing more than ever before. As people borrow more it is not surprising that many people experience debt problems at some point in their lives and pick up a poor credit rating.
There are a number of ways you can get a bad credit rating. These include county court judgements (CCJs), mortgage or remortgage arrears, credit card arrears, defaults on loan or high purchase payments, or an IVA or bankruptcy.
When you apply for a remortgage or any form of credit from a lending institution, the first thing they will do is to check your credit rating with credit reference agencies like Equifax or Experian.
If you are looking to remortgage and suspect that you may have a poor credit rating, you should check your rating before applying with any lender. If you are refused by a lender the refusal will be noted on your rating, making it even more difficult to remortgage.
Although many more lenders are joining the adverse credit remortgage market, the choice is much more limited than for standard remortgages. Because of this, you will have to search much harder for a product that suits you.
We recommend that you use an adverse credit broker to help you find a remortgage. Adverse credit re mortgage brokers will have an in depth knowledge of the industry and should be able to tell you if you are eligible for an adverse credit remortgage. In fact, the majority of adverse credit remortgages are arranged through brokers.
Ask family and friends if they can recommend a good broker. Also, try to choose a regulated adverse credit remortgage broker that will compare products from a number of lenders to find the best deal for you. Many brokers are tied to just one lender.
The good news is that you have a very good chance of getting a remortgage. Adverse credit remortgages, however, charge higher interest rates than standard products so you will have to pay for the privilege.
On a more positive note, an adverse credit remortgage is a good way to repair your credit rating. If your remortgage application succeeds and you keep up with repayments for three years or more, you should no longer have a bad credit rating. This means you can shop around for a much cheaper deal in the standard remortgage market.
Because of the high interest rates associated with adverse credit remortgages, they may not represent a better deal than your current remortgage. Adverse credit remortgages, however, could be a good way to consolidate your debts if you are having debt problems. Alternatively, you could take out an adverse credit remortgage over a longer term than your current home loan, thereby reducing your monthly repayments to give you some financial breathing space. Remortgage advice like this is feely available from brokers.
