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Bad Credit

CCJ’s

Missed Payments

Defaults

DMP & IVA

Bankruptcy

Fed up of hearing no from a high street building society or bank?

Or you just feel as though remortgaging is off the table due to your bad credit?

Please don’t worry. It is very normal for customers of The Mortgage Broker Scotland to have bad credit. Whether it a CCJ on your record, missed payments, defaults or if you are in an IVA or DMP, there ARE options.

Of course, it is more complicated, but don’t worry, our experienced mortgage advisers will be with you every step of the way. We can quickly do an independent search of the market with the aim of finding you a remortgage deal that suits your needs and without impacting your credit file.

Can I remortgage with bad credit in Scotland?

Absolutely, yes. You can get a mortgage with bad credit. It can of course be more complicated depending the level of adverse credit that you have got. Some mainstream lenders will accept some degree of bad credit, such as Late Payments, Defaults, and even small CCJs, however if the adverse credit doesn’t fit with their criteria, there are plenty of lenders in the market that provide remortgages for those with bad credit.

There are plenty of lenders that you may not be aware of that can help you remortgage with bad credit. These are often referred to as specialist mortgage lenders or adverse lenders, but believe us when we say that this is very normal in the market and you are not alone or without options.

How can I remortgage with bad credit?

Securing a mortgage can be a minefield at the best of times. Getting in contact with a mortgage broker who has got experience and knowledge of the market would be the best option. This will ensure that you have advice based on your individual needs and financial circumstances. A mortgage will take time to understand your requirements, search the market and explain the options to you to ensure you get the best mortgage rate possible.

Remortgaging with bad credit in Scotland, is essentially the same process as any other remortgage. The fundamental difference is the complications in ensuring you find a lender that will provide a mortgage based on your credit file. Lenders all have different criteria and they take a different stance on adverse credit. It does mean that you unfortunately may be faced with a slighter higher interest rate, but every remortgage will go through affordability calculations regardless if you have bad credit or not.

The Mortgage Broker will take all the stress of the remortgage process away.

Can you be declined a bad credit remortgage?

There is always a chance of being declined a remortgage. It all depends on the nature of your bad credit, the time that has passed since the credit file has been adversely effected and of course the extent of your financial situation.

However, a mortgage advisor will search the market, and can test your affordability without impacting your credit score. The advice will also ensure that all the pre-approval credit checks have been done in advance of the application process. This will limit the risk of a bad credit remortgage being declined before it even reaches the lender.

CAN YOU GET A REMORTGAGE AFTER BANKRUPTCY, WITH A CCJ, IVA OR DEFAULT?

The answer to this question, is yes, it is possible to remortgage with these on your credit file. However, your mortgage advisor will assess whether or not this is the best option.

If your credit score is low, you may well be better off remaining with your current lender and switching mortgage products. There are many factors to take into consideration and therefore crucial you get the right advice. For example, there maybe early repayment charges (ERC’s) on your current mortgage.

Lenders all have their own criteria and each one can differ slightly.

CCJ’s and Defaults,  if satisfied, are more likely to be accepted, however, it’s not always required. Some lenders have different products and tiers of credit issues that affect criteria.

If you are in an IVA then you apply for a mortgage, but it all depends on how long ago your IVA was registered and what remortgage value you are looking for. The Mortgage Broker has specialist lenders for this type of bad credit remortgage.

DMP’s: You can remortgage whilst in a Debt Management Plan (DMP).

You really need to focus on rebuilding your credit file as this will always support any options you have in getting a remortgage with bad credit. Therefore, it’s a good idea to maintain all bill payments on time and do things such as register on the electoral roll if you are not already. The Mortgage Broker can talk you through all the beneficial things you can do and how to stand the best chance of getting a remortgage with bad credit, but also just qualifying for a mortgage full stop. Anything that helps boost your credit score before applying for a mortgage is advantageous.

CAN YOU REMORTGAGE WITH A DEBT MANAGEMENT PLAN (DMP)?

Debt management plans usually have to be in place and paid satisfactorily for at least 12 months. However, you can remortgage whilst in a DMP yes, and there are some lenders that take a really fair stance on customers within a Debt Management Plan. The amount you can borrow will depend on your affordability, the amount of capital you have in the property and your DMP payments being up to date.

The lender will require proof of this from whoever the Debt Management Plan is with. The longer it’s been running and showing to be paid on time, the better it looks to the lender.

It is also possible to settle the DMP with a remortgage. This will of course depend on the amount outstanding and the amount you can remortgage for, as well as establishing if this is a financially smart move for you. Your creditors may well indeed accept a lessor figure in light of the option to have the debt management plan settled early.

WHAT DEALS AND RATES ARE AVAILABLE IF YOU ARE REMORTGAGING WITH BAD CREDIT?

Whether remortgaging with bad credit or not, it is always our goal at The Mortgage Brokers Scotland to find you the best rate. Our role is to understand the extent of the poor credit on your credit file and search the lenders that we know look favourably on your circumstances.

There are thousands of mortgage products and plenty of specialist lenders in which we will search high and low to find the best rate. There is a need to shop around with bad credit, but your options may be more limited. Therefore, it is even more important to use a mortgage adviser as The Mortgage Broker Scotland has access to products and lenders that you cannot access directly.

Mortgage Rates will be slightly higher if the lender is taking more risk in lending on bad credit, but there are different kinds of deals, lenders and rates available on the market and which one is right will depend on your financial picture.

Your mortgage broker will understand your financial position, and be able to assess exactly which lender will fit that required criteria.

ARE THERE MANY BAD CREDIT REMORTGAGE LENDERS?

Yes, plenty!

There are hundreds of bar credit remortgage products, and many lenders in this space. In fact there are more lenders that lend to bad credit, then there are that don’t.

This is because even the main high street lenders and banks, will accept a degree of bad credit. Securing a deal shouldn’t be too much of a hassle and should be relatively straightforward. Again it does depend on the level of adverse credit, however.

IS IT BETTER TO IMPROVE MY CREDIT RATING BEFORE REMORTGAGING

Absolutely – it is always better to improve your credit rating if you can.

You can look at your credit record before applying and that way we can open the doors to a wider market for you. Speaking to a mortgage broker will up your options and help you to find out the most cost-effective way forward for you.

HOW DO I IMPROVE MY CREDIT SCORE OR RATING?

Best practice would be to ensure that you are registered on the electoral roll. Making sure that you’re paying off any commitments on time and not missing any payments. The big one is do not apply for any massive sums of credit when you’re looking at applying for a mortgage. Also pay off as much as you can on any existing loans and credit cards.

There are options to remortgage for debt consolidation, which may be the right option for you should you want to reduce outgoings to creditors to one monthly payment. This gives more support in reducing your lines of payments to manage and can help keep on top of meeting payments on time.

HOW DO I APPLY FOR A REMORTGAGE WITH BAD CREDIT?

The Mortgage Broker Scotland will do all that for you. There’s not really any difference remortgaging with bad credit, but we can do the research to find out where we are best placing your criteria and prevent the application being declined. Be aware that some lenders may want a higher deposit; some deals are up to 95% Loan to Value. Depending on the level of adverse credit that may not be available to you, it’s a good idea to make sure that you’ve got enough deposit.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.