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Can You Remortgage With Bad Credit?

Is it worth remortgaging if you can't access the lowest interest rates? It may be because even a small reduction in your monthly mortgage costs might allow you to pay back other debts faster, or you could think about how remortgages work and use the process to consolidate all your debts into one account.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-07-17
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Can You Remortgage With Bad Credit?

One of the most common remortgaging queries we receive is, can you remortgage with bad credit, in what circumstances and with which lenders?

Is it easy to remortgage with a less-than-perfect credit score? Possibly not, but it's far from a huge challenge with support and guidance from a skilled, independent broker with expertise in the bad credit market.

Let’s look at how remortgages work, is it worth remortgaging at bad credit lender’s interest rates, can you remortgage with bad credit, and which factors to keep an eye out for.

Can I Remortgage With Bad Credit?

It’s doubtless simpler to remortgage if you have a flawless credit record, but that’s not the case for millions of people, and a few late payments needn’t make the process too complex. However, is it easy to remortgage with more serious credit issues such as IVAs or bankruptcy is a slightly different question.

Most lenders will offer the best interest rates, and more approvals, to applicants with higher credit scores, but if you’re wondering can I remortgage with bad credit, the answer is likely yes.

Is it worth remortgaging if you can't access the lowest interest rates? It may be because even a small reduction in your monthly mortgage costs might allow you to pay back other debts faster, or you could think about how remortgages work and use the process to consolidate all your debts into one account.

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

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Can You Remortgage With Bad Credit That is Serious?

In most cases, you can remortgage, but the right lender might depend on the exact circumstances. It’s also important to know what happens if you can’t remortgage because if you're about to switch to a lender's SVR, even a higher remortgage rate might represent a cost saving.

The trick is to ensure you choose the right lender; because of how remortgages work, a mainstream bank or lender is less likely to accept applicants with adverse credit.

However, is it easy to remortgage is slightly different from taking out a first-time mortgage on a new property because any equity you have built up in your home reduces the risk from the lender's perspective.

Is it Worth Remortgaging if I Have Bad Credit But Good Equity?

The more equity you own, the better, but it depends on your chosen lender. What is remortgaging your house, and why does equity matter? Equity is the difference between what you own (the property value) and what you owe (the mortgage balance).

Higher equity means the lender is taking less risk, even if you have a low credit score or other issues to consider.

Can I remortgage with bad credit and release equity? Quite possibly – this can be an ideal way to repay other debts, improve your credit standing, and utilise the equity in your home to boost your overall rating.

Is it Easy to Remortgage With Bad Credit - & Does the Reason Matter?

Although it might be more challenging than remortgaging with an optimal credit score, the reason you'd like to remortgage can influence the lender's decision.

Most people decide to remortgage because of how remortgages work to clear the existing balance and switch to a more attractive product, so that might be because:

  • They want to remortgage to get a better rate.
  • They'd like to consolidate debts or release equity for other expenditures.
  • They’re remortgaging following a relationship breakdown.
  • They’re at the end of a fixed term and don’t want to pay the SVR.

Thinking about why you'd like to remortgage and what your objectives are can be a useful way to establish is it worth remortgaging and how a lender will perceive your reasons.

What Happens if You Can’t Remortgage Due to a Low Credit Score?

Can you remortgage with bad credit due to a low score? A lot depends on why your credit rating is low, and it could be because you’ve used very little credit borrowing before and haven’t built up a positive repayment history.

Most people decide is it worth remortgaging and then consult an independent broker to determine which lenders are the most viable choice, including specialist bad credit lenders.

Can I Remortgage With Bad Credit, Including Mortgage Arrears?

It could be tricky to remortgage with mortgage arrears because the lender will see you haven’t kept up with your previous mortgage agreement. Is it worth remortgaging with mortgage arrears? If the new mortgage will cost less per month, your income is sufficient, and you pass affordability checks, it could help you get your outgoings under control.

What happens if you can’t remortgage due to mortgage arrears? The best option is to catch up to speed with your arrears and then apply.

What Is Remortgaging a House With a CCJ Like?

CCJs are more serious credit issues, but niche lenders may be happy to lend, although they'll want to understand the details of your CCJs, including the dates, whether the CCJs have since been satisfied, and any context behind them.

Older CCJs that have now been settled might be less of an issue, but because of how remortgages work and the risk assessment process, large or recent CCJs could mean your choice of lenders is more limited.

Can I Remortgage With Bad Credit, Including an IVA?

An IVA may be acceptable to some lenders but not to others. Is it worth remortgaging with an IVA? If you can repay the balance beforehand, it may improve your prospects, but a good history of making repayments on time will be sufficient for some specialist lenders.

Is it Easy to Remortgage After Bankruptcy?

Bankruptcy is a serious credit problem, so it might not be possible to remortgage at the time. However, once your bankruptcy is discharged, you might be able to remortgage.

A lender will look at the time that has passed, whether you’ve since kept up to date with your finances, and any reasons that contributed to the bankruptcy, such as redundancy, illness or other loss of income.

If in any doubt, please contact Revolution Finance Brokers at your convenience for more advice about can you remortgage with bad credit and what a lender might look for when assessing your application.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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