If you’ve had credit issues in the past, missed payments, defaults, CCJs, or even bankruptcy, you might think remortgaging is off the table. The good news? It’s still possible. While it may take a little more planning and the right approach, many homeowners with imperfect credit successfully remortgage every year.
- How Bad Credit Affects Remortgaging
When you apply for a remortgage, lenders assess:
- Your credit history (to judge risk)
- Current income and outgoings
- Loan-to-Value (LTV) of your property
Bad credit doesn’t automatically mean refusal, but it may limit your choice of lenders and affect the interest rates you’re offered.
- Situations Where Remortgaging with Bad Credit Works
- Your credit issues are historic (e.g. a missed bill from 5 years ago). Lenders are more forgiving the older the problem.
- Your Loan-to-Value is low (e.g. you own 40%+ of your home). More equity = lower risk for lenders.
- Your income is stable with regular payslips or proven self-employed accounts.
- You use a specialist lender that caters to adverse credit customers.
- Steps to Improve Your Chances
- Check Your Credit Report
Look for errors and get them corrected. Even small mistakes can harm your application. - Clear Small Debts
Paying off credit cards or reducing overdrafts can strengthen your profile. - Avoid New Credit Applications
Too many recent searches can lower your score. - Get Your Paperwork in Order
Lenders want to see stability. Be ready with payslips, bank statements, and ID. - Consider a Specialist Mortgage Broker (like us!)
We know which lenders are open to applicants with bad credit, saving time and rejected applications.
- Alternatives if You Can’t Remortgage
If a remortgage isn’t possible right now, you still have options:
- Product Transfer: Switch to a new deal with your existing lender (often no credit check required).
- Debt Consolidation: Consider other ways to manage debts while maintaining your mortgage.
- Wait and Reapply: Credit issues fade over time; in 12–24 months you may qualify for better deals.
- Pitfalls to Avoid
- Payday Loans: Many lenders view them negatively, even if repaid on time.
- High Fees: Some bad-credit deals come with hefty arrangement fees, check the true cost.
- Extending Your Term Too Much: It may lower monthly payments but increases overall interest.
Key Takeaway
Having bad credit doesn’t mean the end of your remortgaging options. With the right strategy, and often the help of a broker, you can still secure a new deal, avoid expensive SVR rates, and even start rebuilding your financial profile.
