Remortgage with bad credit
Securing a remortgage with a less-than-ideal credit history can be demoralising. Many lenders traditionally prefer applicants with excellent credit records. However, it’s important to understand that it is still 
possible to have your remortgage application considered by a lender. You can take comfort in knowing this is even if you have less-than-perfect credentials.
Can you remortgage with bad credit?
How to get a mortgage with bad credit
If your credit score is not satisfactory, there are several measures you can take to better your prospects of securing a mortgage.
- Give it time: Allowing the passage of time to work its magic can be beneficial for blemishes on your record; as months and years go by, these issues may appear less severe. Plus, if your financial status has improved in that period, even better.
- Consider your partner’s credit history: When you make a purchase with a partner, their credit score will be considered in addition to yours. Thus, it’s wise to consider your partner’s financial history before making any decisions.
- Repair your credit history: Establishing a pattern of on-time payments and responsible credit usage is vital to repairing your credit history.
- Minimise your risk: Apply for a mortgage when you have a steady income and try to provide a sizable down payment, which could mean looking into more economical properties.
- Honesty: First, mortgage lenders will perform extensive checks, and attempting to conceal adverse credit is a major red flag.
- Demonstrate understanding: To make a favourable impression on lenders, explain the cause of your financial hardship and show how you have taken steps to rectify it since then.
Understanding rates on bad credit mortgages
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Should I buy a house with bad credit or wait to improve my score?
If you have an adverse credit history, obtaining a mortgage may be possible, though improving your score could open up more favourable loan options. Here are some of the benefits and drawbacks of getting a bad credit mortgage:
Pros
- Choice: Those with milder credit issues will likely have several mortgage options.
- Take out a bad credit mortgage instead of waiting to begin your home ownership journey —jumpstart the process towards your dream house.
Cons
- If your credit score is not optimal, you may be subject to paying unreasonably high interest rates.
- A higher deposit may be required to secure a mortgage if your credit score is low.
Checking your credit score
Do you have concerns about your creditworthiness? In that case, checking how each company has assessed your credit can be helpful. Their scoring systems may vary slightly.
Once you have your credit report, evaluate it carefully. Identify potential steps for improving your credit score and ensure all information about you is accurate. Waiting until your credit record improves may be advisable, depending on your specific circumstances. This could make more cost-effective mortgage deals available to you. A qualified mortgage broker can guide you through suitable mortgage types. They can advise you on whether delaying or proceeding with your mortgage application would yield greater benefits.
Before applying for a mortgage, be reasonably certain you won’t face rejection. Each credit application is recorded on your financial history. Multiple unsuccessful applications can significantly lower your credit score. Opt for a ‘soft check’ by the lender rather than a formal application if possible. A soft check won’t appear on your record. However, be aware that soft checks may not uncover all relevant information. Potential issues could still come to light when you submit an official application and receive either approval or rejection.
Why seek the advice of an expert mortgage broker?
