Remortgage with Bad/Poor Credit UK

Let’s be straightforward.

Whilst finding remortgage deals with bad credit can be challenging, don’t lose heart. Securing a new mortgage with a less-than-perfect credit score isn’t out of reach.

Several specialist lenders offer the best remortgage deals with bad credit, even if your credit history isn’t spotless and has a few complications.

Indeed, you can.

It’s crucial to understand that certain marks on your credit file carry different weights, and securing bad credit remortgage deals remains achievable.

Lenders tend to be more understanding if you’ve missed a single payment some time ago and can explain the circumstances.

However, if you’ve recently defaulted on multiple mortgage payments consecutively, lenders might be hesitant to trust your ability to maintain regular repayments.

Fortunately, different lenders employ varying criteria to evaluate your creditworthiness.

You’ll be pleased to discover that some lenders don’t even use credit scoring systems.

This means that whilst your current provider might not offer you a new deal, other lenders specialising in remortgage deals for bad credit might. Success lies in finding the right lender for your situation.

Generally not.

This scenario is known as an unencumbered mortgage and follows similar requirements to standard remortgages.

The outcome largely depends on your remortgaging purpose.

Essentially, bad credit remortgages on unencumbered properties undergo the same thorough assessment as conventional mortgages.

There are numerous valid reasons to seek a remortgage, even with adverse credit.

These include:

• Debt consolidation. This involves combining your existing debts into your monthly mortgage payment. Often, this results in reduced interest rates on your outstanding debts, helping you clear them more efficiently.
• Home improvements. If your property requires significant improvements, remortgaging can provide the necessary funds for extensions, crucial repairs, or that overdue kitchen renovation.
• Significant purchases. Perhaps you need to replace your vehicle? Or you’re considering property investment? Remortgaging can be an effective way to finance substantial purchases.

There are various other motivations; refer to our article on recent remortgaging trends for a comprehensive overview.

Your poor credit rating could stem from various factors.

You may have a history of missed payments or mortgage payment arrears.

Perhaps you’re currently following a debt management programme to address your outstanding obligations.

Each credit issue on your record will impact your credit report differently.

The more negative marks present in your history, the more hesitant financial institutions may be to extend credit to you.

Our expert advisors have successfully secured remortgage deals for bad credit who are facing various circumstances:

• Low credit score
• Late payments
• Mortgage arrears
• Defaults
• CCJs
• Debt management plans
• IVA
• Bankruptcy
• Repossession

Every adverse credit event appears on your credit report and affects your overall credit rating.

Whilst obtaining the best remortgage deals with bad credit is achievable, it requires more effort and expertise.

The complexity of your application depends on several factors, including the nature of adverse events, their timing, and your property’s equity position.

Financial institutions scrutinise your credit history because past credit difficulties often indicate potential future challenges.

When seeking bad credit remortgage deals, lenders might be more cautious about approval, and if successful, typically offer higher interest rates.

Ring us today on 03330 90 60 30 or get in touch to speak with our knowledgeable advisors.

Nevertheless, each case is unique. Your specific circumstances might present more opportunities than initially anticipated.

Our experienced brokers will evaluate your situation thoroughly before matching you with suitable remortgage deals for bad credit.

This approach not only safeguards your credit score but also maximises efficiency.

Related quick help remortgage guides: 

• Remortgaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension

For detailed insights into how lenders assess specific adverse credit situations and how specialist providers can assist, continue reading below.

Remember that even specialist lenders exercise additional caution when considering remortgage applications with adverse credit history.

Lenders’ decision-making process typically considers these key factors:

• The loan-to-value (LTV) ratio – this represents your mortgage amount compared to your property’s value, expressed as a percentage. Generally, higher equity (lower LTV) and larger deposits lead to more favourable mortgage terms.
• Deposit – substantial deposits typically result in better mortgage offers.
• Income – the relationship between your borrowing amount and earnings is crucial. Most lenders typically cap lending at approximately 3.5 times your annual income.

Naturally, your unique circumstances, including your credit history and current financial situation, will impact your application.

Let’s examine how various adverse credit situations might affect your remortgage application…

Having no credit history means your credit report shows no borrowing activity within the past 7 years.

When seeking remortgage deals with bad credit, lenders may view no credit history as similar to having poor credit.

Every lender conducts a thorough assessment of your credit history before determining your eligibility for the best remortgage deals with bad credit.

Whilst a low credit score or unfavourable credit history may limit your options with mainstream lenders, solutions are available.

Although a low credit score doesn’t automatically disqualify you from remortgaging, you’ll likely need to pursue specialist lending options.

Several providers specialise in bad credit remortgage deals, making it essential to consult a comprehensive market mortgage adviser.

This approach is preferable to submitting multiple applications to different banks, which could further damage your credit rating.

Mortgageable offers a free Equifax Credit Report as part of its service, with no obligation to proceed. Something worth considering.

When seeking remortgage deals for bad credit, mortgage payment arrears can pose significant challenges, particularly if combined with other credit issues.

Lenders consider late or missed mortgage payments particularly concerning, as they suggest potential difficulties in maintaining future repayments.

Your chances of securing a remortgage with arrears will vary based on how long ago they occurred and your available equity.

Specialist adverse credit mortgage providers may offer solutions even with recent arrears on your record.

The market now includes more lenders willing to consider applicants with County Court Judgements (CCJs).

Having CCJs doesn’t automatically prevent remortgaging, with timing being a crucial factor.

Your chances of remortgage approval typically improve the longer it has been since the CCJ was registered.

Lenders will evaluate both the number of CCJs and their settlement status when considering adverse credit remortgage applications.

Remortgage eligibility with an Individual Voluntary Arrangement (IVA) varies depending on whether it’s current or historical.

An active IVA may restrict your remortgaging options, though lenders often show more flexibility as you’re not seeking additional credit.

Securing a remortgage during an IVA is feasible, and it might even provide a means to settle the IVA completely.

However, for those seeking remortgage deals bad credit with an active IVA, you’ll need to demonstrate a consistent mortgage payment history for a minimum of 12-24 months to satisfy lender requirements.

For personalised guidance on best remortgage deals with bad credit, consult a specialist advisor or lender experienced in adverse credit mortgages to assess your eligibility.

When considering bad credit remortgage deals whilst on a debt management plan, it’s crucial to evaluate whether you meet the necessary qualifying criteria.

Most remortgage deals for bad credit require an LTV (Loan-To-Value) ratio of approximately 80%. If you fall short of this threshold, securing equity release through remortgaging may prove challenging.

Even with substantial equity, perhaps owning half your property outright, lenders will require evidence of your ability to maintain repayments whilst managing your debt management scheme.

Completing a debt management plan typically improves your remortgage prospects, though you may still need to approach specialist adverse credit lenders.

Related reading: 

• Reasons for remortgaging.
• Remortgaging to release equity.
• Remortgaging to buy another property.
• Remortgaging with bad credit.
• Remortgaging for home improvements.
• I own my house outright can I remortgage? 
• Capital raising mortgages

Previous property repossession needn’t permanently prevent future remortgaging opportunities.

The key lies in approaching specialist adverse credit lenders and demonstrating your ability to meet their deposit and affordability requirements.

Bankruptcy represents one of the most significant credit challenges from a lender’s perspective.

Fortunately, various mainstream and specialist lenders now offer remortgage solutions for individuals with historical bankruptcy records.

For comprehensive guidance regarding bankruptcy remortgages, please contact our team to explore your available options.

Payday loans, characterised by their high interest rates, rarely contribute positively to your credit profile, and mortgage lenders generally view them unfavourably.

These loans appear distinctly on credit reports, allowing lenders to identify your historical usage of such facilities.

Generally, lenders interpret payday loan usage as an indicator of financial management difficulties, significantly impacting your creditworthiness and potentially limiting your options to specialist adverse credit lenders.

If you have a poor credit score, you’ll typically find that remortgage deals with bad credit come with higher interest rates compared to standard offerings.

The impact on your interest rate largely depends on the timeframe of adverse credit events. For instance, if you had a late payment or missed a bill several years ago, this may have minimal effect on the interest rates available to you.

However, recent significant credit issues like CCJs or property repossession are likely to substantially influence the best remortgage deals with bad credit that lenders will offer.

Outstanding debts, particularly CCJs or IVAs, typically reduce the number of available bad credit remortgage deals and inevitably affect the interest rates you’re offered.

The longer the time elapsed since your credit difficulties, coupled with evidence of your commitment to improving your credit score, the better your chances of securing remortgage deals for bad credit at competitive rates.

Generally, it takes between 6 to 12 months for your credit profile to recover, as this is when negative markers begin to be removed from your credit history.

Given the dynamic nature of the mortgage market, lending criteria are continuously evolving.

Consequently, we cannot provide a fixed list of remortgage options on this page.

For those with significant credit issues, approaching specialist lenders who focus on providing remortgage deals for bad credit is often the most practical solution.

Usually, working with a specialist mortgage broker or advisor will help you access the most suitable guidance and options.

Here at Mortgageable, we maintain relationships with numerous lenders and can direct you toward the best remortgage deals with bad credit, regardless of your credit history.

We invite you to contact us today for an obligation-free discussion about your circumstances.

It’s essential to understand the costs associated with remortgaging, particularly when seeking bad credit remortgage deals, as these typically involve higher interest rates.

If you’re looking to remortgage with adverse credit, consider these crucial factors to enhance your chances of securing remortgage deals for bad credit with favourable terms:

Avoid the banks

It’s crucial to understand that within the competitive mortgage market, bank advisors are incentivised to secure customer commitments swiftly.

Consequently, they routinely perform credit checks on willing applicants.

While this approach works well for those with pristine credit histories, it’s potentially problematic if you’re seeking competitive remortgage deals with bad credit.

Submitting a credit check with a lender unlikely to approve your application is not only time-consuming but could potentially worsen your already compromised credit report.

Your optimal approach is to collaborate with a comprehensive market broker who specialises in securing the best remortgage deals with bad credit and has extensive experience helping clients with challenging credit histories.

Get your credit report

Understanding your current credit situation is crucial when seeking remortgage deals with bad credit. It’s vital to identify any adverse events affecting your creditworthiness and develop strategies to address them.

Leading credit reference agencies like Experian, Check My File, and UK Credit Ratings offer comprehensive credit check services.

These agencies compile slightly different information sets, helping you understand potential reasons for previous lending rejections and identify areas for improvement when seeking bad credit remortgage deals.

Importantly, checking your credit score through these agencies is completely free and won’t negatively impact your credit rating or result in any penalties.

Calculate your LTV

Understanding your loan-to-value (LTV) ratio involves assessing your property’s current value against your existing equity or deposit.

Your LTV plays a crucial role in securing remortgage deals for bad credit, as lenders use this metric to evaluate applications and determine suitable offerings.

Generally, applicants with higher LTVs need stronger credit profiles compared to those with lower LTVs, as larger deposits and equity positions represent reduced risk for lenders.

Improve your credit score

One effective method to enhance your credit rating is utilising a credit-building card specifically designed for those with adverse credit histories.

Regular use and consistent monthly repayments demonstrate responsible borrowing habits, gradually improving your creditworthiness and increasing access to better remortgage deals and bad credit.

CashPlus is a widely recognised credit-building card suitable for individuals working to improve their credit standing.

Should I improve my credit score if I have a poor credit history?

When seeking to remortgage with adverse credit, you may encounter challenges during the application process, particularly with traditional high-street banks that don’t specialise in the best remortgage deals with bad credit.

However, many borrowers find that taking proactive steps to improve their credit standing yields positive results.

Key improvement strategies include addressing incorrect credit report entries, settling outstanding debts, maintaining current payment obligations, and potentially using a credit-building card to demonstrate consistent repayment behaviour.

While these improvements might not satisfy traditional lenders’ strict criteria, especially if you fall short of their specific requirements, they can significantly enhance your options.

Specialist lenders offering bad credit remortgage deals present an excellent alternative, as they’re experienced in handling adverse credit situations. These lenders may offer more competitive interest rates if you demonstrate commitment to credit repair and financial responsibility.

These specialist providers understand that financial circumstances can fluctuate and typically place greater emphasis on your current and recent financial behaviour rather than historical issues. Their expertise in remortgage deals for bad credit makes them particularly suitable for borrowers working to rebuild their credit profile.

When exploring remortgage deals with bad credit, every application undergoes a thorough affordability assessment, regardless of your current financial position.

Lenders evaluate your income against expenditure to calculate your debt-to-income ratio, a crucial factor in determining eligibility for best remortgage deals with bad credit.

Following the Financial Conduct Authority’s 2014 guidelines, your debt-to-income ratio shouldn’t exceed 45% of the total remortgage amount offered.

To estimate your remortgage affordability, follow these straightforward steps:

• Calculate your monthly income by dividing your annual earnings by 12.
• List all monthly expenditures, including bills and existing financial commitments.
• Calculate your debt-to-income ratio by dividing monthly expenses by monthly income and multiplying by 100.

A lower ratio generally indicates better affordability. You can improve this ratio by reducing expenses or increasing income.

When seeking bad credit remortgage deals, consulting with a specialist advisor is highly recommended.

Our experienced brokers can evaluate your circumstances and identify suitable lenders offering remortgage deals for bad credit.

This approach not only safeguards your credit rating but also significantly reduces time spent searching for appropriate options.

Key points:

• Securing a remortgage despite adverse credit history remains achievable.
• Specialist brokers with bad credit expertise can provide valuable guidance.
• Understanding your credit report helps identify potential obstacles.
• Focus on lenders specialising in adverse credit situations.

If you need assistance with remortgaging despite credit challenges, our team is here to help.

We’ll comprehensively search more than 90 lenders to identify the most suitable remortgage deals for bad credit for your specific circumstances.

Call us today on 03330 90 60 30 and speak to one of our friendly advisors.