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Applying for a Re-Mortgage Loan with Bad Credit

Finance for People with Poor Credit is not Impossible

Aug 9, 2009 Fleur Hupston

Bad credit re-mortgages are not as difficult to obtain as a borrower may think. Lenders realize there is a growing market for those with adverse credit ratings.

More and more people today are experiencing problems as a result of financial difficulties in the past. It can be surprisingly easy to be given a bad credit rating which can affect the ability to borrow money into the future.

What is a Bad Credit Re-Mortgage?

An adverse credit re-mortgage is the process of paying off one mortgage from the proceeds of a new mortgage.

Homeowners who have equity in their property can raise money to consolidate debt even if they have credit problems. Re-mortgages can consolidate debts into one loan that is easier and cheaper to manage and this type of loan accounts for a significant element of all mortgage lending.

Re-mortgaging to consolidate existing debt is a sound reason to do so as paying off debts on time will substantially improve a borrower's credit rating.

Many lenders are offering competitive mortgage products to cater for this growing market. Many lenders recognize that many people may have had financial problems in the past often through no fault of their own, for example, a home owner may have been retrenched or had a period of illness to cope with.

“Having over eight years experience in the non-conforming market, we understand that borrowers in this sector are primarily concerned with being able to comfortably afford their mortgage repayments and repair their credit as soon as possible” comments Paul Hunt, Head of Marketing, Platform Home Loans.

How to Apply for an Adverse Credit Re-Mortgage

Re-mortgages are available for those who have credit problems, IVAs, CCJs, mortgage arrears and past or current bankruptcy status but it is a good idea to approach a specialist mortgage broker to avoid damaging credit rating even further. Specialist mortgage providers who deal with bad credit re-mortgage applications all the time can source the best options for a home owner in this position and find a fair deal.

Are Bad Credit Re-Mortgages More Expensive?

Bad credit or non-conforming loans typically charge one to two per cent more than standard deals, but are available to people denied access because of a bad credit score.

While more expensive than standard mortgages, bad credit mortgages offer people a far better deal than borrowing conducted on credit cards or through doorstep lenders. After a borrower's credit rating improves, he or she can access cheaper mortgage deals.

It must be remembered that if a home owner is unable to keep up repayments, his or her home will be at risk of being repossessed. Also, there are additional costs to consider, such as legal costs and fees, property valuation costs and broker's fees.

The copyright of the article Applying for a Re-Mortgage Loan with Bad Credit in Mortgages/Loans is owned by Fleur Hupston. Permission to republish Applying for a Re-Mortgage Loan with Bad Credit in print or online must be granted by the author in writing.

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