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Getting a remortgage with defaults
Getting a remortgage approved with defaults will usually mean using a specialist lender as most high street lenders don't allow defaults to be registered for remortgage applications - what sort of remortgage can you get with defaults?
Mortgages that allow defaults tend to be termed as poor credit remortgage's, adverse credit remortgage's or bad credit remortgage's - regardless of what they are called they all mean the same thing, that is the remortgage product will allow defaults to be registered on your credit file without impeding the remortgage application.
What type of remortgage can you get with defaults?
The type of remortgage product available with defaults are pretty much the same as what's available without defaults. There are fixed rate remortgage's, discounted, tracked and variable rates available which can be repaid by either capital repayment (capital & interest) or interest only.
The major difference in the available rates will be that the interest rates associated with poor credit remortgage's will normally be higher that that of a 'normal' high street remortgage - how much higher the interest rate will be is dependant on the severity of the defaults, with that being said the defaults allowed are also determined by the loan to value.
How much can you borrow on a remortgage with defaults?
The amount a remortgage product will allow you to borrow with defaults will depend on your ability to afford the repayments, which will in part be determined by the individual lenders income and affordability calculations and by the amounts of defaults and other adverse credit items listed on your credit file. The better your credit file looks to the lender the more they will borrow on a percentage basis, what I mean by that is the more loan to value they will allow.
With remortgage's that allow defaults the maximum loan to value will more than likely be 85% or the property value which will probably allow a couple of defaults up to a certain pound amount. If you have more than 2 or 3 defaults adding up to more than a couple of thousand pounds then you could be restricted to 80% or less.
The best way to find out what you can borrow is to speak to a mortgage broker that understands how defaults can affect your remortgage application.
