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Remortgage with bad credit – New Affordable Deal DESPITE a Poor Rating
Remortgage is a gateway to an affordable deal on your current mortgage deal, but bad credit becomes the biggest hurdle. Everyday culture of the lending industry offers only high rates to a low credit score person. In such conditions, the doubt is natural to arise that what is the significance of remortgage with bad credit? Will that actually fulfil the financial purposes with a cheaper option. The usual reasons for a refinance are to get a lower rate and smaller monthly instalments.
Shine Mortgages realises all the concerns when you want to get a good remortgage deal but have doubts due to derailed finances. We, as the online mortgage broker can queue a range of bad credit remortgage lenders with inexpensive alternatives to your current mortgage.
- We search across the mortgage market to find out the best options for you.
- We handle the paperwork to offer a hassle-free process and mortgage search.
- We are fee-free mortgage brokers. You give not even a penny for our services.
Start the search with an enquiry on our website and get an instant reply with several promising lending options. Your quote appears on the screen in just 10 minutes and to know more about the deals, the 24X7 service is another support. Before you make a final selection, we guide you on the complete scenario, a remortgage bad credit applicant goes through.
You Can Get Poor Credit Remortgage In Following Conditions
Bad credit situation is not about a particular incident or condition. It is the reflection of the poorly managed finances, and there can be many reasons for that. Until a situation is not worst, you can always get a poor credit remortgage. Other facets of the low score are acceptable such as –
- Late or missed payments
- Discharged bankruptcy
- Defaults (frequently missed repayments)
- Individual Voluntary Arrangements (IVA)
- County Court Judgments (CCJs)
The above conditions are acceptable but only if your recent financial behaviour has improved. The lenders are ready to consider your application and give a chance despite financial flaws, but the efforts should be on both sides.
CRIETRIA OF LENDERS FOR POOR CREDIT REMORTGAGE
When your finances and remortgage application go on the dissection table of the lender, they draw attention on many points. Several factors work collectivity to announce whether one can qualify for further consideration or not. Here are the general elements of the lending criteria that you should know.
- Current income status – Income is always the key factor with a decisive role that describes how like is a person to get approval on a financial product. Good income, timely increments, additional source of earning, all work in a team to decide the repaying capacity.
- Employment status and stability - Both are important. The status – employed, self-employed, freelancer etc. and the stability how long is the employment history. The lending policies applicable for an employed are never same for the applicant of a bad credit remortgages for self-employed.
- Income-outgoing ratio – The income outgoing ratio of 60:40 or 70:30 (70% income is considered idol, which may not be possible in the case of a poor credit person. In that case, a 50:50 ratio is can be considered.
If you want to get through the process without much hassle, it is necessary to qualify on the above points without any failure. These are the vital conditions for a remortgage with less-than-perfect credit score.
Boost Credit Score Before You Remortgage With Bad Credit
If the mortgage industry has measures for low score applicants, the latter one should fill the risk pit for the lender. Show some improvement in money management, and we can help you with the best deals on remortgage with bad credit.
Some suggestions here may help you move on in the right direction and earn some rise in credit rating –
- Control expenses – A remortgage company is always keen about the spending behaviour of the applicant with bad credit. After all, the way to manage costs considerably affects personal finances. Make a budget, distribute in 'priority' and 'no priority' expenses and manage accordingly. Keep an eye of self-discipline on other costs such as movie, amusement park, weekend parties etc.
- Pay more than minimum on credit card – Most of the remortgage bad credit borrowers we deal with have credit card repayment issues. We all know how drastic is the drop of rating when we pay late for a credit card. To improve the condition, some people pay the minimum amount, but that does not help much. The minimum payment is only equivalent to the interest part due on the card, and it deducts a tiny or almost nothing from the principal.
- End the lines of credit that are not in use – If the need to pay recurring expenses has ended on the part of finances, stop using the line of credit. They show as an obligation in your name and leave less space for the score rise to pass. Store cards and if possible credit card etc. should either be used with caution and if possible, terminate the account and show a larger space in creditworthiness. This improves the credit score too.
- Leave good debt on the report – A poor credit person may not fail on every front. Maybe one debt went out of repaying capacity, but some other debt receives timely repayments, then it is a great thing. Such debt is called a good debt, and it instantly fuels some improvement in the credit rating. At the time of the mortgage procedure, it helps justify the conditions of the applicant to the lender.
Every small and significant change in your finances can prove life-saviour at the last moment to bring the remortgage approval. Your financial advisor or broker can give useful suggestions on this matter. Another important tip here is, check the credit report to detect any possible mistake as wrong information makes the situation even more severe. Bad credit is not a monster but a temporary phase of financial life that needs to be repaired with due remedies.
Can You Apply For Bad Credit Remortgages With A Debt Management Plan?
Yes, you can ALWAYS apply for remortgages with a debt management plan. The fact about this condition is, varied lenders, respond to this condition in various ways. The mortgage industry acts quite flexible nowadays, but your favourite mainstream lender may hesitate a bit on the application. It can provide the approval but with its conditions on interest rates and repayment plans which may not suit you.
Some mortgage companies can take it as a positive sign because getting into a debt management plan shows the determination of a person to manage debts. A significant role is played by the size of the size and type of obligation. Multiple small debts managed through the DMP does not create many concerns for the lender. If some big obligations are there, the mortgage companies ask more questions with an emphasis on your financial future.
Like the borrower, the lenders of the bad credit remortgages want to avoid any possible risk. They ask how you are performing on the front of DMP, and if you are doing well, the fund approval journey gets a bit easy.
How Shine Mortgages Helps You Get Cheap Remortgage Deals?
We understand your needs and plan our mortgage solutions accordingly. Low credit mortgage seekers are already insecure about the interest rates because usually the high-cost deals are considered, as their ultimate destiny. In such conditions, the actual aim of a remortgage that is affordable deal than the previous one does not reach its destination.
Before you let the worry enter your mind, we want to assure that despite the low credit score, the cheap mortgage deals are available. We have our methods to arrange affordable loan offers for fund seekers. Want to know how we do that?
- A vast panel of 90+ lenders keeps us equipped with multiple choices of lenders that we can offer to the borrowers.
- We include only those mortgage companies in the team that commit to provide reasonably priced deals.
- The whole-of-the market approach keeps us updated on the latest deals that we can and should arrange for you.
- Every year we refresh our panel with new mortgage companies that give you a wider choice of interest rates.
- Our team of experts gives you advice on credit score improvement before applying for a mortgage to win lower interest rates.
- We are the experts of ‘bargain’ and convince the lender for you while revealing rational aspects of your financial capacity.
- We do in-depth income assessment to bring out all the possibilities that can be presented to the lender to prove you deserve approval.
- Specialized assistance during tough times, our efforts at the time of corona to support the borrowers is the latest example.
After all, the prime aim of our existence is to serve you the due satisfaction, which includes the surety of affordable remortgage deals. We should have the capacity to do that, and nothing else is more important than this.
What Happens To An Applicant Declined By A Poor Credit Remortgage Lender?
Indeed, it is a big shock for anyone who gathered all the hope to apply for a remortgage with adverse credit but got a denial. But at the same time, one needs to understand that all doors are not closed yet. Every year, Shine Mortgages receives multiple applications expressing the concern on remortgage possibility after a decline by a mortgage company.
This is what happens after a decline by a lender -
- Such situations are harsh, but that does not mean there is no second chance. The market has sundry options; an instant reach to them can be planned through a mortgage broker.
- People with denial apply to new mortgage lenders after waiting for three to four months. By that time, through timely repayments earning a boost in credit score can be beneficial.
- Normally applicants with such experience try to pay off some of their debts or show a good debt to be safe when next time they apply. It is like the compensation of the loss happened in the first remortgage application.
To be precise, as you can read above, nothing drastic or bad happens to those with a denial. However, the concerns get intense on the future possibilities of getting a low credit remortgage, but with the right guidance, a solution can be attained. If there are options for the most challenging conditions like CCJ and IVA, then a denial cannot be a powerful reason to leave someone hopeless.
Is It Possible To Get A Remortgage With Bad Credit And Arrears?
Usually, it is not a healthy sign for the future remortgage possibilities because lenders always deny to overlook mortgage arrears. At the same time, it is not advisable to lose all hope and not try for the desired thing. One chance can be obtained if your arrears are not recent and in fact, quite old. You should know that mortgage companies are always ready to act a bit flexible on the small reasons of hope they see in the borrower.
Shine Mortgages can help explain your circumstances to the lenders and increase the chances of access to funds. The usual advice though is to stay away from the situation of arrears; they make things more complicated. Try to avoid the day when you get into the need to apply for a remortgage with bad credit and arrears.
Questions That Lenders Ask When You Apply for The Bad Credit Remortgages
Whether virtual or face-to-face, interactions happen between the lender and the borrower. A round of questions and answers takes place to take the hint of the repaying capacity of the borrower. You should know already what questions the mortgage company can ask from you.
Here is a series of the questions that lenders usually ask from the borrowers –
What is the purpose of remortgage?
- Debt consolidation?
- Big purchase?
- Home Renovation?
How do you use the property –
- To live in?
- To rent out?
When will the introductory period on your current mortgage end?
- Already ended
- Within next month
- Within the next five months
What is the value of your property?
How much have you paid on the existing mortgage?
The bunch of questions above prepares you to know already the aspects that can affect the approval chances, as they are the vital elements of the application.
Interest Rate On Remortgage When Credit Score Is Poor
There is a certain impact on the poor credit score on interest rates of remortgage. The intensity of that impact depends on the recency of the credit score issue. The missed or late payment issues occurred a few years ago always have a weaker effect on the interest rates. On the other hand, the same incidents in the last few days are sure to leave a potential impact on the rate of interest.
The type of credit issue also affects the total cost of remortgage. A missed payment on a bill is fine, but if it is about a severe CCJ or bankruptcy case, the mortgage deals are prone to a higher price. It shows a certain impact on the monthly instalments that may be hefty due to your past financial issues.
Normally, the applicants wait for six months, and during this time, they keep their finances in control. After this duration, the poor credit mark is removed from the credit record. If you belong to such condition, then advisable is to wait for at least six months and pay your debts on time. By the end of this time, you can earn a considerable improvement. As a result, attainment of a cheaper deal is possible.
Are The Traditional Mortgage Companies Only Choice For Bad Credit Remortgages?
No, the mortgage options are not restricted anymore to mainstream or traditional lending. The emergence of niche-market lenders with specialized knowledge also has equal authority and resource equivalent to conventional lenders. They can provide you with funds with flexible borrowing terms and conditions.
At Shine Mortgages, we have not only the high street mortgage companies but also online and private mortgage lenders that offer the best rates in the market. We also have building societies that provide lucrative options with cheaper rates. The alternatives to mainstream have better fee structure and reasonable prices on the loan offers.
The specialized mortgage products for bad credit situation are available with expert knowledge to guide you on the process. For any doubt, we are there to throw light and reveal the right direction. You can get a remortgage with bad credit from a mainstream bank, private lender as well as building society without any doubt.
Irrespective of the purpose, you can borrow funds. Whether you want to apply for a remortgage debt consolidation for poor credit or a poor credit remortgage for home improvement, everything is possible. Only keep the fact of repaying capacity in mind, and if that is in the place, approval is possible to achieve.
Do Not Forget To Consider Following Facets Before Remortgaging With Bad Credit
A patient decision is the first demand for any mortgage borrower. You may have the haste to borrow funds, but that should not disturb focus from several important aspects that you need to consider beforehand.
Are you confident about repaying without failure during the complete tenure?
It should be among the important concerns because the financial decisions of today should always be taken with an insight into the future. Plan your finances and see if the coming years are in the queue with the current mortgage plans or not? In place of regret at a later stage, it is better to act wisely on the current one. Isn’t it?
Which one is better for you? A fixed-rate or a variable rate?
Remortgaging is mainly about working on the cost part to make a mortgage deal more affordable. As the interest rate plays the prime role in taming the cost, you should choose its most suitable type. Fixed and variable rate are the two prime types that offer different benefits. Decide which one is more suitable for personal finances and accordingly manage to repay capacity to win approval on that part. A remortgage bad credit calculator can help make all the necessary calculations.
What is the fee structure? (If that is applicable)
Varied types of fees unpredictably increase the total cost of a remortgage deal. You should have a clear idea about the types and amount of fee applicable to the loan offer in preference. Make sure the lender acts transparently on this point and until there is no clarity, do not finalise the lending company. Your mortgage broker can help you understand the fee thing with required details and can also ask the lender to consider if the amount is high.
What extra features do you want in the remortgage?
Sometimes the additional features offered by a lender become the prime reason for a borrower to switch the mortgage. Payment holiday, assured festive discounts, free home valuation etc. are some of the additional features that some lenders offer. Before you remortgage, have a thorough look at the extra + points that come with the mortgage.
Your caution towards the vital issues is very important to fulfil the actual purpose of remortgage. The above points can show the other side of the coin on a remortgage deal. The mortgage market is big, and to choose the right option, some points of scrutiny should be there.
Challenges for those who bought the house with a smaller deposit
No need to mention how drastically the property market has changed after coronavirus pandemic. The higher LTVs are available after an intense struggle, and with bad credit, they sometimes look like a mirage that appears but is unattainable. However, Shine Mortgages can help you get an affordable deal, but it is vital to know the fact part that relates to this condition. If you purchased the home with a small size deposit and you want to remortgage with bad credit, it can be a bit difficult.
- With already a derailed payment history, approval struggle is tough, and nowadays, the LTV ratio is not as high as it was before covid-19.
- The equity on homes is already quite low due to a cold property market. It can be difficult to use it to borrow the desired amount on the mortgage.
Solution for The Situation
Try the following things to calm the stress of the situation and improve the chance of remortgage approval –
- You have to keep a big saving to fill the gap between the property value and the mortgage amount you can qualify for.
- Ask the mortgage brokers to suggest you the best possible escape windows and access the funds as easily as possible.
- Wait for some time to see the next move of the market and look for a higher LTV deal.
While you try all the above things, do not forget to focus on your personal finances because that is the prime pillar to help you win for any approval. Show the intention to improve in credit rating with timely repayments of bills and debts.
What features you see in the remortgages for bad credit lenders we bring ?
Your convenience is the most important thing for us, and that can be assured only through the workable remortgage poor credit options. After all, this is why you come to us for.
The mortgage lenders on our panel have the following features – No hidden fee – Transparency is the first thing that we expect from the lenders on our panel. If they want to work with us, they cannot keep anything hidden, especially on the cost part.
- Same day approval decision – Rest of procedures may take the due time, but the initial approval decision comes on the same day. We understand your anxiety and arrange the mortgage companies that have speedy decision capacity.
- Commitment speedy process – With required interaction between you and the lender, the process moves on at a good pace. As we are also there in the picture to manage the documentation part, it is the guarantee that you get the funds on time.
- Advanced online document verification – No need to make multiple visits, our lenders offer easy and instant online verification. It is the reason that you get the approval decision on the same day.
- Customised deals – Yes, it is the biggest relief for a mortgage borrower to get a personalised mortgage deal that reflects his concerns. Remortgage with the right type of deal makes the burden easy.
With all the above features, we can assure you a happy and safe borrowing experience. Get a promising switch to a new deal lower rates and small instalments for any purpose. Our team of industry experts is always there to assist in the best possible manner and leave no stone unturned for your financial well-being.