If your current mortgage deal is coming to an and would like to apply for a remortgage, chances are you questions and concerns; more so if you are concerned that you have a poor credit rating. It is understandable to feel slightly intimidated by the possibility of not getting a good deal (or any deal) because of your credit rating. In this article, we aim to address some of the frequently asked questions related to mortgage applications and poor credit. So, can I remortgage with bad credit?

In short, the answer is yes, you can. While it is natural to be concerned where your credit score is considered “poor”, there are various factors to take into account when it comes to remortgaging with bad credit.  Moreover, one lender’s perception of a poor credit rating may be different from another. Hence, bad credit does not mean that getting approved for a mortgage is impossible.

A bad mark on your credit rating is not the most severe problem anyone who is buying a home or remortgaging should consider. Many people have the same problem, yet succeed in securing a mortgage.

What does a bad credit mean when applying for a mortgage?

When you have bad credit, it means there is a history of default debt payments over a specified period. Unfortunately, bad credit can have a negative impact on mortgage loan applications. Lenders consider applicants with bad credit generally as a high risk

However, as mentioned earlier, a bad credit score does not immediately mean you won’t qualify for a mortgage loan. Several specialist lenders are willing to work with individuals will less than ideal credit scores to help them step on to or climb the property ladder. Therefore, getting approved for a mortgage loan in spite of a lousy credit score all boils down to finding the right lender.

Can I remortgage with bad credit? And more importantly, will it cost me more?

Assessing the risk of extending a mortgage loan to a person with bad credit affects the rates. Therefore, you can expect that bad credit mortgage is generally more expensive. However, this will depend entirely on the lender so you should still shop around and compare your options.

Do high street banks extend bad credit mortgages?

High street banks, in general, will be slightly more reluctant to extend a mortgage loan to a person with bad credit. The age of negative marks on your credit rating also matters. For example, if you had a CCJ from three years back, and have had no similar incidents since, it may not be a concern for the bank anymore.

Can a mortgage broker help you fix your credit score?

A mortgage broker can be your best ally if you want to apply for a mortgage with bad credit. Mortgage brokers have extensive knowledge of the entire market which means they put you in touch with specialist lenders that are willing to extend a mortgage to people with bad credit history.

Not only that, but a mortgage broker can also help you address your credit concerns as they can, as qualified financial advisers, give you pointers on how to fix your bad credit score.

 

Think carefully before securing debt against your home, your home may be repossessed if you do not keep up repayments on your mortgage.