Updated: December 15, 2021

Remortgaging With Bad Credit

Struggling to remortgage because of your bad credit? Find out how you can still remortgage your property even if you have bad credit.

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No impact on your credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 15, 2021

Remortgaging is often a good idea if you want to take advantage of the latest rates and make sure your mortgage agreement continues to fit your needs, but it isn’t always straightforward if you have bad credit, or have had credit issues since taking out your original mortgage.

If either of these situations applies to you, you’ve come to the right place. In this guide you’ll learn whether this is possible, what kind of pitfalls you might encounter and how a specialist broker can help you get the best remortgage deal.

Can you remortgage with bad credit?

Yes! There’s no reason why you can’t remortgage with bad credit, either with your current lender as a mortgage renewal or another provider. How straightforward the process is will depend on whether you have existing bad credit that was present when you took out your current mortgage, or have had new credit issues since agreeing your original deal with your lender.

If your bad credit was present when you took out your mortgage and you’re sticking with your current lender, the process is likely to be simple, as the amount of checks your mortgage provider has to carry out will be minimal, assuming your other circumstances are unchanged.

For homeowners who are planning to switch to a new lender, the process might involve more steps, since your new mortgage provider will be starting your application from scratch, and will want to assess your income, credit history and the property value for themselves.

The remortgage deals that you qualify for are likely to depend on the age, the severity and the reason for your adverse credit. The vast majority of people applying to refinance with bad credit would benefit from the services of a specialist bad credit mortgage broker.

What if your bad credit occurred after you took out your mortgage?

If your bad credit is more recent and occurred after you took out your original mortgage, your current lender will likely carry out thorough checks to establish the circumstances surrounding your credit problems and make sure you still fit their eligibility criteria.

You might also find it more difficult to switch to a new mortgage lender if your bad credit is more recent, since older issues are less likely to scupper a remortgage application. That said, there are many other factors that the mortgage provider will base their lending decision on.

As we’ve already touched on, the severity of your credit problems will come into play. For instance, it’s more difficult to remortgage after a repossession or a bankruptcy than it would be if you had a few missed mobile phone payments or the odd late payment on your mortgage.

Some lenders will also ask you about the reason behind your bad credit history before deciding whether you can refinance. You’re more likely to be penalised for general financial mismanagement than you would be for an unexpected life event, like a redundancy.

Speak to a bad credit broker

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How to remortgage with poor credit

There are two ways to do this. Firstly, you could contact your current mortgage lender and arrange a discussion about remortgages. They’ll look over your mortgage details and assess your bad credit before deciding whether you still meet their eligibility criteria.

This can be the fastest way to refinance, but it comes with a major pitfall. By limiting yourself to your current mortgage lender, you’d be restricted to just one range of mortgage deals and would be at risk of missing out on a better remortgage that might be available elsewhere.

With this in mind, you might think it’s a good idea to do some research and look for a better remortgage deal yourself. This also comes with drawbacks as the best deal can be difficult to find without professional advice. The remortgage market is vast and online rates tables and a quick Google search is unlikely to scratch the surface, and even if you were to find a deal that bad credit borrowers qualify for, how do you know it’s the best one available to you?

Why you should use a bad credit broker

A mortgage broker who specialises in bad credit can tip the odds in your favour and help you get the best deal by providing the following services…

Bullet Tick Searching the entire market for the best bad credit remortgages
Bullet Tick Matching you with the lender who’s best positioned to offer you a good deal
Bullet Tick Offering you bespoke advice on optimising your credit report
Bullet Tick Guiding you through the remortgage process and helping you with your paperwork

By doing all of the above, you’ll save time, money and potential bad marks on your credit report when you remortgage.

How to refinance with a bad credit mortgage broker

Follow these simple steps to get your remortgage application off on the right track…

  • Download your credit reports: This can make a big difference if you have bad credit since optimising your credit file can improve your prospects. Be sure to download all of your credit reports, challenge any inaccuracies and have outdated information removed.
  • Get your documents ready: Having your paperwork sorted in advance can speed up the remortgage process, so make sure you have your last three months’ bank statements and payslips to hand, as well as your mortgage paperwork. You can find a full list of the documents you’ll need for a remortgage in our complete guide.
  • Let us match you with a broker: You’ll need to use the right broker rather than choose one at random, and in this case, that means a bad credit mortgage advisor who specialises in helping people refinance. By using our free broker-matching service, you can rest assured that you’ll be paired with a remortgage expert who’s the ideal fit for you.

Make an enquiry and we’ll set up a free, no-obligation chat between you and them today.

How much equity you’ll need

The most competitive remortgage deals are typically reserved for borrowers with at least 25% equity and the best rates tend to kick in at when the loan-to-value (LTV) ratio is 75% or less.

In terms of the minimum amount you’ll need, this may depend on the age, severity and reason for your bad credit as the lender will look at these factors when working out how much risk they’d be taking on by offering you a remortgage. The more you have, the lower the risk and the more likely you are to get approved or land the best interest rate available.

Can you remortgage if you’ve missed payments or have arrears?

Yes. If you need to remortgage but have missed a mortgage payment or are in arrears at the time of the application, you can still secure a new deal. Your current lender might not be willing to accept your application under these circumstances, but it may be possible to find a new one.

Specialist lenders who are happy to consider people with bad credit, including mortgage arrears and missed payments, could have better options for you. That includes helping you secure the remortgage you need for your home, including the withdrawal of some equity and a larger mortgage, to help stabilise or improve your financial situation.

Get matched with a bad credit remortgage broker today

The best way to remortgage with bad credit is to find a mortgage broker who helps people with credit problems refinance every day. They have the knowledge and experience you need to boost your chances of approval and landing the best rates and terms available.

We offer a free broker-matching service that will quickly assess your needs and circumstances to pair you with the advisor who’s best place to help you get the best deal on a bad credit remortgage. This will be someone we’ve vetted, trained and handpicked ourselves.

Call 0808 189 0463 or make an enquiry and we’ll set up a free, no-obligation chat between you and your ideal bad credit remortgage broker today.

FAQs

Can I remortgage if my partner has bad credit?

Yes, but your partner’s credit history will be taken into account if it’s a joint mortgage you’re applying for. Mortgage lenders tend to take the overall strength of the application into account, which means factoring in any credit problems either one of you have had.

It’s often advisable to use a bad credit mortgage broker under these circumstances, as a specialist lender might be called for, depending on the severity of the adverse credit.

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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in bad credit mortgages. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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