Best Bad Credit Remortgages 2022

bad credit remortgages

Find out about the new lenders from December 2021 for bad credit remortgages with lower rates and generous loan to value percentages. Some of the lenders are not available on the comparison websites.

Benefits Of Remortgages For Poor Credit

  • Bad Credit Remortgage interest rate at 2.56% variable
  • Adverse Credit, Sub Prime, Default, IVA, CCJ
  • From December 2021- 5 new lenders for bad credit remortgage products not featured on the usual mortgage broker panels
  • 1st UK Money have lenders that offer rates only slightly higher than the big prime banks, even if you have bad credit
  • 1st UK Money have lenders not available on the “far from impartial” comparison websites
  • Loan To Value Ratio of up to 90%
  • Some 1st UK Money lenders have a tolerance of previous mortgage arrears

Poor Credit History? CCJs Defaults? Arrears? We Can Help! Quick Quote Form

  • Remortgages
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    Please enter a value between £50,000 and £25,000,000
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    Please enter a value between £10,000 and £25,000,000

Further Benefits Of 1st UK Money Remortgages With Bad Credit History:

  • Friendly, impartial and professional service
  • We push your application with lenders making sure it doesn’t slow down or stop
  • Our through fact find process ensures minimal risk of you being rejected by the lender at the last minute
  • We have spent over 11 years building rapport with lenders and their underwriting teams, while improving our internal processes
remortgage deals for bad credit

1st UK Have Built Relationships With Lenders That Understand People’s Needs

If, (like many people) you’ve logged into a free service such as clearscore or noddle and discovered some credit problems you’d be correct to conclude that your high street bank might not be the best place for your bad credit remortgage.

However, 1st UK has some specialist remortgage lenders who will consider lending to people with past or current credit issues. Some of these lenders have rates and terms not far from the big banks.

Put simply, if the mortgage company believes you can afford the payments each month, they are likely to lend you the money even if you have bad credit, in the form of missed payments, defaults, or CCJ’s.

Adverse Remortgage? No Impact On Your Credit Score – Quick Quote Form

  • Remortgages
    Get your 1 minute no obligation quote
  • Please enter a number from 50000 to 25000000.
    Please enter a value between £50,000 and £25,000,000
  • Please enter a number from 10000 to 25000000.
    Please enter a value between £10,000 and £25,000,000

Interested In Remortgage Deals For Bad Credit? Other Benefits To Consider:

  • Can be used to consolidate debt
  • Borrow more money for things like home improvements or holidays
  • Lower the existing LTV of your current mortgage
  • Peace of mind that comes with fixing your repayment for a set period.
remortgaging with bad credit

Reasons To Partner With 1st UK As Your Adverse Credit Broker

Mortgages are financial products with some strict criteria, so comparisons are often difficult or impossible. You may meet the requirements of four or five lenders but just miss others. You may also prefer a fixed rate over a variable rate, or a discounted rate over a certain term.

We offer an impartial whole-of-market service that includes mainstream lenders and broker only specialist products. Our brokers have an in-depth knowledge of lender small print and work hard to get you the best remortgage deals for bad credit the first time around. Over many years we have built up an efficient process to ensure applications are pushed promptly towards completion. 1st UK are partners. We work on the principle that your mortgage is an investment in your family’s future.

1st UK consistently offer some of the best rates in the UK, and that’s with very special thanks to our very extensive panel of lenders

For further information on bad credit remortgages, or to discuss your options, contact 1st UK today. One of our advisors (adverse history specialists) will discuss your situation and when you’re ready, guide you through the remortgage process with a suitable lender based on your unique circumstances.

can you remortgage with bad credit

What you’re about to read is a collation of information written with one goal in mind…

To lessen the stress associated with arranging a refinance by putting you in a position of knowledge to understand precisely how poor credit re-mortgages work.

Read it, absorb it, take notes and if you’ve any questions that remain unanswered – ask us. We’re a friendly bunch of regular people who just happen to know more than most about poor credit finance.

First up and that’s to address whether you need to be stressing over remortgaging with adverse credit in the first place.

We’re not here to tell you it’s all hunky-dory and to raise whatever capital you fancy just by making a quick online application. When you have less than perfect credit, do not apply online for any financial product before scrutinising every fine detail of the offer. We are, however, confident that we can get you remortgage deals for bad credit where others have failed.

When you are looking to remortgage you have to be sure you can afford the repayments as the lenders affordability test the mortgage providers will do.

There is no point telling lies to your find a mortgage expert as when a credit reference agency is consulted, previous payday loans, bill payments, pretty much any credit event will show in your credit records and maybe change your mortgage terms.

Too many remortgage applications due to bad mortgage advice will also be on your credit records. On that note what affects your credit rating?

There are quite a few things:

Any late payments towards any loan, and any accounts you hold where the company report your account management to the credit reference agencies. That could be your broadband provider, mobile provider, and even the water board. It doesn’t have to be a late payment on a credit card, store card, or any financial product. That being said, defaulting on a secured loan will affect your credit rating more severely than paying your gas bill late.

Going above your agreed overdraft limit will have an adverse effect on your credit files, as will overdrawing without an arranged overdraft.

A high income-to-debt ratio will be considered risky due to a lower amount of disposable income. When you add up your total debt repayments, it should be no higher than 45% of your household income. Less is better. Over 45% of a debt-to-income ratio can be indicative of financial trouble ahead.

Too many applications for finance showing on your credit files. For large amounts of borrowing on secured loans, it’s advisable not to have more than two applications per year. So, one application in six months. If you’re rejected, hold back before applying elsewhere.

Poorly managed debts that have resulted in bankruptcy such as County Court Judgements will make it difficult to obtain finance.

Active DMPs (Debt Management Plans or Trust Deed), even though the debt is being managed successfully, is still a disadvantage.

People who are financially linked to you who have a history of defaulting on finance agreements can affect your credit assessments. Your credit reports will have details about who is economically connected to you.

It should be noted that no matter what you do to improve your credit worthiness, there are no guaranteed bad credit remortgages. All applications are assessed by the lender and that’s the only guarantee there is. That you’ll have your application considered but it doesn’t guarantee it’ll be approved.

remortgage with arrears

The Alternatives To A Remortgage For Bad Credit (UK Nationwide)

Many of the homeowners 1st UK who have helped in the past have approached us feeling trapped. Bad credit spikes interest rates; sometimes to the point of un-affordability.

Even if your credit history is trashed, there are options available. The most popular alternative is bad credit home loans/home loan companies for adverse credit. That’s if you need to because there are some high-risk lenders around that offer unsecured loans for large amounts.

Partial high-risk lenders list:

  • The Mortgage Lender
  • Precise Mortgages
  • Pepper
  • Vida Home Loans
  • Magellan Home Loans

Different lenders take on different risk levels. The above are just some of the select lenders 1st UK work with that do approve bad credit homeowner loans when the banks and building societies refuse.

Alternatives for borrowing do exist regardless of what is included in your past debt history.

It can be tough remortgaging with bad credit and arrears, and even active DMPs. There are poor credit home loans available from a lender somewhere. The problem’s finding them, while simultaneously avoiding the companies that exist to extract as much profit as possible.

1st UK prides itself on having an extensive number of expert lenders on our panel, positioning us in a way to offer finance to those who need it and at the time they need it most.

Alternatives To Remortgaging Your Home

If you have an existing mortgage that is an exceptionally good deal, for example:

  • An interest only mortgage that helps your affordability
  • A mortgage with an exceptionally low fixed or tracker rate
  • A mortgage that was based on your circumstances before you had bad credit
  • A mortgage with a longer term that is no longer offered by today’s lenders

You should consider avoiding re-mortgaging completely. If you are unable to borrow the money you need on an unsecured basis you should consider getting a secured loan.

Below are some of the lenders and deals that you can look at to see if they suit your needs:

Are you over 55?

Rather than re-mortgaging your home, you could consider equity release. It may be possible for you to pay off your existing mortgage, release some equity then make no monthly payments at all.

The interest on the equity release mortgage further erodes the equity in your home so the interest and principal are paid off when you die or move into long-term care by the sale of your home.

There are also some tax planning advantages to equity release that may save you a lot of money.

Poor Credit Remortgages Are Available

Remortgaging with adverse credit is doable. However, for very bad credit remortgage loans, guaranteed approval isn’t something you’ll find. All you will find available is that you’ll be guaranteed to be considered. Not necessarily approved.

As with many things, there are no guarantees. However; we do make a guarantee and that’s to ensure that we try our very best to help every time. Regardless of how tarnished your credit reports appear to you, chances are, there’s a lender approved in a worse situation. There are a few select high-risk re-mortgage companies on our panel.

Ever heard the saying, there’s always someone worse off than you? That’s true. Just turn on the news or open a newspaper and you’ll see it for yourself. It seems bad, but it could be worse.

Think Carefully Before You Apply consider expert advisers

With bad credit, there’s a lot more to consider than the figures you’re presented with. What we advise you to do is use a mortgage broker who has expertise with subprime loans for people with bad credit as they will know how the lenders work.

Here’s why…

For bad credit applicants, a standard variable rate tracker is not usually the way forward. The reason is, it’s linked to one of two rates:

The Bank of England (BoE) Base Rate

The LIBOR (London InterBank Offered Rate) Rate

These affect bank to bank lending. The vast majority of mainstream lenders, such as the big four banks in the UK:

  • Halifax
  • Barclays
  • HSBC
  • Lloyds Banking Group

…Will offer standard variable rate and tracker products that track the Bank of England rate, which affects the rate of interest you get for your mortgage.

When you’re affected by a poor credit rating, it’s bad credit lenders who specifically cater to high-risk borrowers you’d be looking to work with. The majority of adverse lenders for bad credit will borrow the finance they need to provide you with the homeowner loan that you need. That means they need to borrow, and that’s often at LIBOR rates – used for bank to bank lending. That pushes the interest rates higher for the borrower.

As subprime products can have high-interest rates, if you’re opting for a tracker-type deal, there are capped fixed rate remortgages available. This type of secured loan option can give you a safeguard. Whilst the interest rate can go down as well as up when it goes up, there’ll be a ceiling for which the rate can’t go past.

One way to take advantage of lower rate borrowing is to get a discounted rate on an introductory offer, then when that expires, it could revert to a tracker rate, for which you can be given a capped rate letting you know exactly what your maximum interest charge is going to be. Essentially, with a capped rate, you won’t pay more, but still, be able to take advantage when the interest rates drop.

How Adverse Credit Remortgage Lenders Work

They work the same way as any lender you’ve ever dealt with. The only real difference is the fees, interest rates, and deposit amounts are higher. That’s because signs are showing on your credit files indicating that you might be a risky investment.

Every remortgaging with bad credit lender has one goal in mind. That’s to make a profit. They aren’t going to do that if they take on customers who don’t repay. To mitigate that risk, they charge higher interest rates. There can be higher arrangement fees, but that’s not always the case as you can also find fee-free deals for bad credit applicants. That just means the conveyancing costs and legal costs are covered by the lender.

When you refinance, the lender will place the first charge on your property, which is how it’s secured against your home. If you default, that first charge entitles them to repossess to recover the money they let you borrow.

As far as the costs go for accessing refinance, the highest cost is often the arrangement fee. This has to be considered in the overall pricing to get the best deal. You could have one provider offer a 4.95% fixed rate for two years with an arrangement fee of £1,195, and another with a higher interest rate of 5.4% on the same two-year fixed-term deal with a lower arrangement fee of £695. The higher interest can work out cheaper over the two-year fixed-term deal due to the lower arrangement fee.

How Risky Are County Court Judgements & Arrears To Lenders?

This is the part where your selection pool of potential lenders narrows. When you apply for a remortgage online with adverse credit, UK applicants are risk level assessed for suitability. EU nationals, nobody really knows what the situation is as of 2017. The Independent is already reporting that mortgages are being denied due to uncertainty following the triggering of Article 50 (Brexit). To be eligible for such refinance deals, UK lenders “may” want to see proof of British Citizenship.

All lenders have different appetites for risk. To figure out if they’ll extend you finance, they’ll use a point-based system to credit score you using the information recorded in your credit reports.

In the case of CCJs and secured loan arrears, these are considered to be severe by the majority of lenders. For specialist lenders though, they will score them differently, and they’ll take into account when the CCJ was issued. If it was close to six years ago, it could be a score of one, meaning it’s assessed as being low-risk. If though, the CCJ was issued in the past six months, it could bump the rating to a three, meaning it’d be considered as high risk.

Should you need to remortgage for bad credit and arrears that are currently affecting your finances, it’s likely you’d need to apply to a high-risk lender such as Magellan Home Loans or Precise Mortgages, both of which are broker only and part of 1st UK specialist lenders panel.

How to get a mortgage with bad credit but good income

This is an incredibly frustrating part of such capital-raising – when your income’s high and even a £20,000 lump sum deposit isn’t enough to sway a lender’s decision.

This is a problem many first-time buyers encounter. It’s not unusual for a late payment on a mobile phone contract to be recorded on your credit file. Where this becomes a problem is with online applications. Even going to the bank, the advisor is running your figures through an automated system that picks up on defaults on your credit report. This can automatically see you with your application rejected.

When your finances and personal circumstances are assessed, the most weight is given to your credit reports and the negative entries first and your affordability based on the household income second.

The best way forward is to ensure that you’re using the higher income wisely and that’s to lower your debt ratio. This applies to first-time re-mortgages too. A high debt ratio is over 45%. When you add your car finance, unsecured loans, and credit agreements for phone contracts, laptops, and any Debt Management Plans that are in place, it needs to be lower than 45%. The lower it is, the better, and for mortgages, the higher a deposit you can raise the better too.

In the short term, one consideration would be to raise your monthly payments to pay down existing debts with the goal being to clear them, the less debt you have, the more disposable income you have. It’s what’s left of your income that matters once all your living expenses are accounted for. Therefore, if you’re spending is high, so too will your risk.

I want a remortgage with poor credit but have already been refused or declined – what should I do?

Hold off on applying anywhere else. Six months is a good rule of thumb to use for spreading your applications out. If you have too many loan applications run close together, it’s recorded on your credit files. That can make you look desperate to get money, indicating that you may be in a spot of trouble and need cash in a flash.

Lenders will think you aren’t managing your money very well. Should you have applied to a mainstream bank and been rejected for a home loan, and now looking to use subprime re-mortgage lenders, still wait until around six months before applying.

In the meantime, what you can do is use hypotheticals by getting lenders to do a soft check/quote search on your credit reports to find out if you’d be eligible for their mortgage products and get an indicative figure of what the costs would be. Then after it’s been six months since you were rejected for a mortgage, try again with a different lender that caters to whatever negative entry/entries are recorded on your credit files.

It’s also advisable to use the six-month gap to review your credit files and correct any errors you find using a Notice of Correction and/or challenge inaccurate entries.

The best mortgage deals for bad credit?

With some lenders getting an adverse credit remortgage can be easier than getting a purchase poor credit rating mortgage deal. It can be argued that people that already own a home do not want to default on the existing poor credit rating mortgage.

The difficulty comes when you want to remortgage with arrears, as this is one of the things that lenders hate. Sometimes the only way out of arrears is to get a bridge then a bad credit remortgage, as the bridge will show it’s paid on time, even if it works on roll-up interest.

Remortgaging with bad credit is relatively easy if you have sufficient home equity and personal income, and some of the better deals have remortgage rates similar to more mainstream prime mortgages, depending on loan to value.

Remortgages for bad credit can also be easier if you have a new partner with a good income and a healthier credit score than you. The main thing is to never get to the stage where you are looking for a remortgage with arrears.

As a rough guide, a bad credit remortgage UK can have interest rates about 1% to 1.5% higher than a prime remortgage deal from a high street bank.

As long as the fees for the remortgage with bad credit history are not that high, it might be worth paying the valuation to get onto a fixed rate or discounted rate, and off the existing lenders expensive standard variable rate.

If you are looking to just release equity, home loans for bad credit could save you paying a redemption penalty on your existing mortgage and the first lender lets the 2nd charge lender have a charge on the property, and the mortgage you have stays the same.

Because remortgage deals for bad credit are more specialist lending products, you may struggle to get good remortgage quotes online as it’s difficult to guess which lenders will accept your circumstances. If you can’t remortgage due to affordability you are in a difficult position, as a very poor credit score can be ok, but insufficient income isn’t easy to fix.

No fee remortgages can initially sound appealing but the best bad credit remortgages that are A+ rated can have a fee that is worth paying.

How Can I Be Sure I have A Good Mortgage Advisor That Can Get Me A Fast Remortgage Offer With A Bad Credit Remortgage Application?

The key to a quick lending decision and low repayment charges is the advisors understanding of the lending criteria and lenders affordability assessment and the effect of your previous and current credit ratings.

If you have credit agreements where you are also close to your credit limit, a better deal may be more challenging in today’s mortgage market.

Remortgage With Bad Credit Without A Large Lender Fee?

If you already know you have a problem with your credit score, and the number of ccjs you have is maybe more than one, remortgaging with bad credit could be a challenge with your current credit report. Without the help of expert brokers you are likely not knowledgeable enough to interpret your credit record.

To get a remortgage at all you need to be very sure when you apply to a lender you have a good chance of being accepted, and if you think you can go to high street lenders with a low credit score as a result of adverse credit history your likely to fail. The failed credit check dents in your credit file and will show you as high risk.

Bad credit remortgage rates can be close to prime credit mortgage deals but you need to know what the best bad credit remortgage deals to apply for.

You must look at yourself from the lenders point of view and be sure the repayments on your mortgage are easily affordable for you without the credit experts saying no, no, no we don’t think this is wise! Even if you or your partner lose your job, mortgage repayments must be made. Your mortgage payment is a priority, much higher than credit cards, catalogues, and other things. You don’t want to be one of the people typing into google “improve my credit” or worse “debt management plan”.

There is another problem with trying to get around the broker fees, and that is a mortgage provider that may give poor credit mortgages may require a mortgage application from a broker where the broker has already worked out the mortgage payments are affordable and your credit cards are not going to be a problem.

If you want to push forward to a mortgage offer and you need to establish your properties value quickly, you need to get the mortgage application right the first time.

It always looks good to mortgage brokers and lenders if mortgage applications are for the same sum as the current mortgage balance.