You could be forgiven for thinking that, if you already have a bad credit rating, the credit crunch has more or less eliminated any chances you may have had for remortgaging. Don’t despair, however, mortgages and re-mortgages are still available for people who have had credit problems in the past as well as those who have no proof of income, such as the self-employed.
It’s true that, if you have a poor credit record, including CCJs and bankruptcy, most High Street lenders probably won’t look at you twice but there are still specialist lenders out there who will approach your situation more sympathetically.
It has to be said up-front that you won’t be offered the best interest rates around as interest rates reflect how risky the lender thinks you might be – if you’re credit history is not wonderful or if you are looking for a high value loan compared to the value of the property, you will pay higher interest. Of particular importance is your very recent credit history, so you should have had no CCJs or additional mortgage arrears in the past three months.
When it comes to how much you can expect to borrow: up to about 90% mortgages are available for a fairly clean record; if there have been problems in the not-recent past, you could probably get 80% to 85%; and even those with very poor credit history can obtain a mortgage up to a maximum of 65% of the property valuation.
None of this is set in stone though and every case is different, which is why we always advise people in this situation to contact a registered mortgage broker. By approaching a specialist broker you:
- Could get a loan that you wouldn’t have been able to find by yourself
- Would only have to make one application only. This is important as multiple direct refused applications would further damage your credit rating
- Might be able to stay in your family home instead of being repossessed or evicted.
The following links may help you find the remortgage solution for you:
Email Mortgages – this company offers free mortgage advice
Finance & Mortgage UK – specialise in what they call adverse mortgages
Cozy Loans – specialise in finding mortgages for those with a bad credit history
Moneysupermaket.com – offer a selection of lenders willing to loan to those with a poor credit profile
If you have used one these companies – or, in fact, any other loan or mortgage brokers – successfully or otherwise, why not help others in a similar situation by writing about it on our bank forum?