Remortgage with bad credit what to look for.
Many people have a bad credit score these days and this can be for a number of reasons. If you have bad credit and need to remortgage to raise money or consolidate existing debts what should you look for.
In these days of the credit crunch there are fewer and fewer lenders offering remortgage for people with bad credit. Those that do lend have a very strict criteria that people need to be aware of. Some lenders will not let you remortgage with bad credit [http://www.jp-financial.co.uk/bad-credit-mortgage.php] if you have missed any payments on your mortgage in the last 3 months. So if you know your current deal is coming to an end you need to do what ever you can to make those payments. If you can't make them and register a default, not only will you not be able to access a new rate, but you will have to stay with your current lender and their rates are going to be high.
So you make the payments what next, well you need to find a broker that has access to sub prime mortgage lenders as not all do. Those that do and stay that they specialise in bad credit remortgages you need to be wary of, as they can charge fees into the thousands to help you switch mortgage lenders. The commission paid by a sub prime lender can be high and some brokers will not charge you a fee if they can help you switch or only a small amount. So watch out for those fees.
Now you found a lender what product do you want, are you going to fix, or take a variable rate either way you need to check the small print, as a lot of these lenders will lock you in for longer than the introductory rate latest. This can be very costly so read the small print and make sure there is no over hang. If you can't find out about over hangs or early redemption charges ask your broker to either explain to you or contact the lender direct.
Arranging a mortgage with sub prime lenders always takes more time as each case has to be individual underwritten. All the work is paper based so not email or electronic applications to speed things up. So give yourself plenty of time to get your new mortgage in place, it can take up to 3 months sometimes to get the mortgage offer out.
So to summarise, leave yourself at least 3 months to arrange a new mortgage, check the early redemption penalties. Don't pay excessive broker fees and make sure you get your payments in on time, you should then not only have less of a problem remortgaging but save yourself a lot of money ion the process.
In these days of the credit crunch there are fewer and fewer lenders offering remortgage for people with bad credit. Those that do lend have a very strict criteria that people need to be aware of. Some lenders will not let you remortgage with bad credit [http://www.jp-financial.co.uk/bad-credit-mortgage.php] if you have missed any payments on your mortgage in the last 3 months. So if you know your current deal is coming to an end you need to do what ever you can to make those payments. If you can't make them and register a default, not only will you not be able to access a new rate, but you will have to stay with your current lender and their rates are going to be high.
So you make the payments what next, well you need to find a broker that has access to sub prime mortgage lenders as not all do. Those that do and stay that they specialise in bad credit remortgages you need to be wary of, as they can charge fees into the thousands to help you switch mortgage lenders. The commission paid by a sub prime lender can be high and some brokers will not charge you a fee if they can help you switch or only a small amount. So watch out for those fees.
Now you found a lender what product do you want, are you going to fix, or take a variable rate either way you need to check the small print, as a lot of these lenders will lock you in for longer than the introductory rate latest. This can be very costly so read the small print and make sure there is no over hang. If you can't find out about over hangs or early redemption charges ask your broker to either explain to you or contact the lender direct.
Arranging a mortgage with sub prime lenders always takes more time as each case has to be individual underwritten. All the work is paper based so not email or electronic applications to speed things up. So give yourself plenty of time to get your new mortgage in place, it can take up to 3 months sometimes to get the mortgage offer out.
So to summarise, leave yourself at least 3 months to arrange a new mortgage, check the early redemption penalties. Don't pay excessive broker fees and make sure you get your payments in on time, you should then not only have less of a problem remortgaging but save yourself a lot of money ion the process.
Source...