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Can I Apply For A Re-Mortgage With Bad Credit History?

It is challenging to applying for a re-mortgage application with bad credit history. High Street, lenders, and building societies in the UK would a run hard credit check when you submit a full mortgage application for a residential remortgage. They will take information from different credit reference agencies to verify your eligibility, in terms of creditworthiness.

If an applicant is having adverse credit issues such as credit card miss payments, CCJs, defaults, miss payments on utility bills, it would be difficult to secure a mortgage with a new lender. However, there are specialist mortgage providers and experienced mortgage advisers who help applicants with adverse credit to seek a new remortgage.

There would be a catch for these applicants as the interest rate and the product fees are on the higher side when you have an adverse credit history. Therefore, it is important to sit with a mortgage adviser to compare whether it is beneficial to stay on the existing lender standard variable rate or remortgage with a new lender at a cheaper rate.

Can I apply for a product switch with the existing lender with credit issues?

If you have an existing mortgage, with a high street lender and planning to remortgage with recent credit issues, one option would be to apply for a product switch with the existing lender. It would be difficult to secure a new mortgage with an external lender as they would do a full underwriting, and a full mortgage application before accepting your mortgage.

On the other hand, your existing lender would not conduct detailed underwriting. If they are happy with your mortgage payments, they will consider providing you with a new fixed deal. This is also subject to basic underwriting. It might be difficult to get over the basic checks on product switch application assessment if your, credit issues are significant. For example, if you have a CCJ recorded within the last three months, the lender would be concerned about providing you a new mortgage deal. There is a high risk for the lender even as an existing customer.

The advantage of applying for a product switch with the existing lender would be time-saving. There would be minimum checks on property valuation and paperwork compared to applying for a new mortgage with an external lender. As you are simply trying to switch from one fixed deal to another fixed deal, the lender would consider the desktop valuation for the property.

On the other hand, if you apply for a new re-mortgage with a new lender, they would require a physical valuation. The lender would instruct a surveyor and it would take time for the assessment and the valuation results to return to the lender. Therefore, applicants could benefit from a hassle-free process once applying for a product switch with the existing lender.

How to find a suitable lender for a re-mortgage with bad credit?

In case if your existing lender is not providing you a new product suits, mortgage deals, then it is advisable to speak to an experienced mortgage advisor. Adverse credit specialist mortgage advisers know, different types of lenders in the UK to arrange a suitable mortgage for any applicant with credit issues.

For example, if an applicant has a residential mortgage with Halifax and had recent credit issues on default utility payments, Flash, credit cards, recently missed mortgage payments, the high-street lenders would not consider the re-mortgage application. There is a higher risk of high street lenders and building societies, declining your mortgage application, which would result in a further reduction in your overall credit score.

Therefore, applicants should first speak to an experienced mortgage advisor before applying to any remortgage lender. The mortgage advice would suggest a suitable specialist lender or building society to submit your new re-mortgage application.

Applying for a re-mortgage with extra cash while having bad credit

It would be difficult to apply for a re-mortgage and extra cash if you have a bad credit record. The specialist lenders would not like a higher loan to value for applicants with poor credit history. However, applicants should review their existing mortgage details with an adviser to seek options for raising extra cash up to the allowed loan to value cap.

Adverse Mortgage lenders have their own criteria for each and every bad credit situation. For example, if you have a CCJ recorded within the last two years, certain lenders might not consider your application. There might be few lenders who would still consider your application with higher interest rates.

It means that a mortgage advisor would have a good understanding of the type of lender that you should approach, depending on your circumstances. Applicants, often think that they can’t apply for a remortgage with a new lender if they have bad credit. This is a common misconception, as there are specialist mortgage providers in the UK to consider re-mortgage applications on both residential and BTL properties.

Undisclosed credit issues at the re-mortgage application

Some credit issues happen without applicants’ awareness. When these applicants apply for a re-mortgage, the lender would check their credit information and disclose the credit issues. For example, if you’re applying for a residential re-mortgage, and you have a BTL property in the background, the tenant might not pay the utility bills in time. The new lender would figure this out, and highlight or flag it on the credit file. Therefore, the disclosure happens only when applying for the new remortgage.

Therefore, applicants need to be careful about their credit reports before applying for any new mortgage. All applicants with bad credit history, need to speak to an experienced mortgage advisor before applying for a mortgage. The applicants should not worry about discussing all the credit issues and difficulties they have had, as it would help.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments. For more info visit site: https://imbonline.co.uk

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Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of our Independent Mortgage Brokers to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisers working for or with Independent Mortgage Brokers are fully qualified to provide mortgage advice and authorised and regulated by the Financial Conduct Authority. All our independent Mortgage Brokers will offer advice specific to you and your needs and circumstances. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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