Credit Repair Remortgage
A credit repair remortgage is a way of repaying bad debts with a remortgage. Bad debts are a constant strain on potential borrowers and applying for future finance with bad credit registered on your credit file can be difficult - we could have the answer.
- Access to bad credit remortgage deals not available on the high street
- Quick decisions given - you could have an answer today!
- Remortgage specialists
- Credit repair remortgage's from 75% loan to value
Apply for better credit terms in the future, get peace of mind and put yourself back in the financial driving seat!
A credit repair remortgage could clear all your bad credit and instantly put you in a better position for future finance terms including mortgage and remortgage applications.
Am I eligible to repair my credit with a remortgage?
Homeowners with enough equity in their property may qualify for a credit repair re mortgage. It would stand to reason that is someone is wanting to repair their credit then they would have bad debts such as missed payments, defaults and CCJ's (county court judgments), this would mean they need to apply for a adverse credit remortgage - this is simply a remortgage product from a specialist lender that will allow an application to proceed to completion with adverse credit being registered on the potential borrowers credit file.
Adverse credit remortgage's are widely available though a number of lenders with products tailored to the credit impaired borrower. You can make a rough estimation to see if you have enough equity in your property to remortgage and repay your bad debts, we have a page just for this called loan to value that you may find useful as it explains how to work out how the loan to value you may need in order to clear everything but for completeness we have put a quick explanation below.
Example:
If your property is worth £200,000 and you have a £100,000 mortgage this would be 50% of your properties equity already spoken for by way of your mortgage. If your bad debts are £25,000 then you would need a new remortgage to cover both your existing mortgage (£100,000) and your bad debts (£25,000) which would mean a total new borrowing of £125,000. To work out the loan to value on this you would simply follow the following:
Total amount needed ÷ Property value * 100 = Loan to value %
If we use the figures above it would look like this
£125,000 ÷ £200,000 = 62.5% Loan to value
Loan to value (LTV) related mortgage and remortgage products step up in 5% increments. So whilst the mortgage you would apply for would be 62.5% LTV the mortgage product would probably be called a 65% or 70% LTV remortgage even though you wouldn't borrow the full 65 or 70% - its just the way mortgage products are, in order for the lender to differentiate products the maximum LTV they will borrow against a property steps up in 5% increments so they can have set underwriting criteria in relation to the risk involved. The higher the LTV the greater the risk for the lender.
What LTV will my new remortgage allow for credit repair?
Realistically it would all depend on your individual circumstances and your what bad debts are registered on your credit file but from experience we would recommend no more than an 70% remortgage (70% LTV).
Whilst working things like this out for yourself will let you know how things work its no substitute for speaking to a professional adverse credit mortgage broker who understands the market and the products available but it is still worth working out, if for nothing else other than you know what you need prior to speaking to a broker.
You could off course let your broker work everything out for you, if they are good at what they do they should be able to explain everything without the jargon and possibly come up with a few options you may not have thought of.
What can a credit repair mortgage do for me?
Credit repair can improve your credit rating in a number of different ways.
If you want to repair your credit by consolidating all your bad debts with an adverse credit mortgage (via a remortgage product) or secured loan then all your bad credit will be repaid in one hit, which will obviously benefit you and future credit transactions as any new credit applications (such as a mortgage application) will not be restricted by the adverse credit listed on your credit file. Lenders will be able to see from your credit file that all your bad debt has been repaid. Whilst the bad debt will remain on your credit file for approximately 6 years they will show as being settled which will look better to a potential lender than the debts still being outstanding.
If on the other hand you want to repair your credit without any further borrowing then you could look at either debt management or an IVA, repairing your credit this way will mean you do not incur additional interest from another loan but it may take longer to repay the bad debts and as such will mean your credit rating will not be repaired as quickly. They will however show your creditors that you have taken positive steps to resolve your bad credit and is usually still a better option than doing nothing at all.
However you choose to repair your credit its important to bear in mind that there are no quick fixes - if you repair your credit by consolidating your credit will be instantly improved but you will have the bad credit listed on your credit file for 6 years and you also have the new loan to repay. If you chose to repair your credit by debt management or IVA then you will have to wait until the debts are repaid and then after that the credit will still be listed on your credit for a further 6 years.
