If you are in the market for a home remortgage loan, it is important to understand how your credit will affect the type of mortgage you are able to get and the annual percentage rate you'll be able to receive. There are many lenders and online financial advice sites, such as this one, that are willing to provide remortgage advice to those looking for a bad credit remortgage.
If you have poor credit and are attempting to get a remortgage, chances are you will run into some problems. Instead of getting a standard remortgage through a High Street lender, you will have to apply for a bad credit remortgage, also know as a sub prime remortgage or an adverse credit remortgage. Many people throughout the UK are in this exact situation. Consequently, there are remortgage lenders that specialise in offering bad credit remortgages or sub prime remortgages that allow people with low credit to still obtain a loan.
What is the difference between a bad credit remortgage and a sub prime remortgage? They are basically the same. Bad credit remortgages are also associated with terms such as adverse credit remortgage, poor credit remortgage and credit impaired remortgage.
What is a bad credit remortgage or sub prime remortgage? A 'sub prime' remortgage indicates that you may have a bad credit history, mortgage arrears, or CCJs. Because of this, you do not meet traditional criteria for mortgage lending. The lower your credit is, the higher the risk that is associated in lending to you. The lender will charge you a higher interest rate to balance the risk associated with lending to someone who does not meet normal credit criteria.
Who needs a bad credit remortgage? Anyone who has bad credit, a county court judgment, loan or credit defaults, rent or mortgage arrears, bankruptcy, decrees, or an IVA could benefit from a bad credit remortgage.
How much can I borrow? If you have a bad credit remortgage, no lender will offer more than 60-65 per cent of the value of your property. In the current economic conditions, a borrower with good credit can expect around 70-80 per cent of the value of the property. In rare circumstances, you might be able to borrow up to 85 per cent.
How hard is it to obtain a bad credit remortgage? Bad credit remortgages are obtainable but they do come with higher interest rates than standard remortgages, typically the interest rates on your remortgage will still be substantially below the rate charged by a credit card company.
Will I always need a sub prime mortgage? No. Sub prime or bad credit remortgages are only needed if you have less than desirable credit. However, if you have a sub prime remortgage and make all of your payments on time for three years, you will have improved your credit score. At that point, you may qualify to refinance with a mainstream remortgage. You will get a lower interest rate when switching from a bad credit remortgage to a mainstream one. In the larger picture, you could save thousands of pounds.Where can I get sub prime remortgage or bad credit remortgage advice? You can find sub prime and bad credit remortgage advice right here at SimplyFinance. Take a minute to fill out our bad credit remortgage form, and we will connect you with a qualified mortgage adviser who will help you find the best bad credit remortgage available to you based on your personal credit history and current financial circumstances.