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What is an Adverse Credit Remortgage?
Individuals or applicants who cannot remortgage through the usual channels, such as via banks or building societies, may be able to do so by using specialist sub prime or adverse credit remortgage & mortgage lenders, who would allow you to change your existing mortgage to a new mortgage even if you have you have 'bad credit' or "adverse credit" listed on your credit file (for example have missed payments or CCJ's, defaults etc)
Why do people apply for a bad credit remortgage?
A ‘normal’ remortgage will typically happen when someone wants to remortgage to a better interest rate, whilst people with adverse credit also remortgage for this reason, experience tells us that people also want to move away from their current lender because they have credit issues (possible missed payments on their existing mortgage), and they want to improve their cash flow - not necessarily by getting a better interest rate but, for example to repaying mortgage arrears or consolidating existing bad debt into their mortgage payments.
The truth is whilst there are similarities in the way lenders view an applicant's credit history, each lender will have its own criteria on which it basis its decision to lend - some will state that the last few months mortgage payments must have been made before they will even look at an application, whilst others will be happy to lend even if the last months mortgage payment were missed.
Different lenders will view credit issues in different ways, one lender may be happy to lend with a £10,000 CCJ registered on your credit file whilst another lender with a similar interest rate will not - if you want to know if you would be able to remortgage we would be happy to discuss your individual circumstances in person.
We would only recommend speaking to a remortgage specialist such as Baker Financial.
Will my Payment Profile effect my adverse mortgage?
A payment profile can be thought of as your credit viewed as a whole - taking all the payment histories from your credit report (say the last 12 months) and building up a financial story of what went wrong, when it went wrong and through correspondence, how it went wrong – again different lenders view different scenarios in different ways, some will be more sympathetic than others depending on your circumstances and payment profile – we already deal with every lender that could help.
- use our experience to get the best results possible
There are a number of lenders who specialise in arranging mortgages for people with 'bad credit' - these are known as 'sub prime' lenders. They will assess your credit worthiness in similar ways to any other lender, but because of the types of applications they deal with, they apply subtle differences in the way they determine whether to lend to you as a client. This can mean that whilst your high street bank or building society would reject you, a 'sub prime' lender may take you on instead.
Who would be best to help me get a bad credit mortgage?
Due to the way sub prime mortgage lenders work it is unlikely they will deal with you directly, they tend only to deal with mortgage brokers who should be able to offer advice and arrange mortgages from a wide range of products. There are mortgage brokers who deal only with impaired credit clients and, from speaking to our clients the advantages of using a specialist broker for adverse credit mortgage application is that they know the market much better than a 'normal mortgage broker' and should be able to offer advice quicker and may have access to specialist deals not available elsewhere.
