Remortgages

Poor Credit Remortgage

Although most financial institutions prefer to offer remortgages to borrowers with sound credit history, some will lend to people whose credit history is less than perfect. These mortgages are known as poor credit mortgages or refused credit mortgages.

People who are behind with their mortgage repayments or have County Court Judgements (CCJs) against them are often desperate to remortgage in order to alleviate their financial difficulties. Several specialist lenders operate in this adverse credit market and the different lenders use a variety of criteria when assessing borrowers' suitability for a remortgage. For example, some lenders will disregard the number of CCJs if the total value owed is small; others will be sympathetic if the borrower has only a single large CCJ outstanding.

Fast Track Remortgages
In many cases, a remortgage can make the difference between borrowers being able to afford their monthly mortgage payments or not, so being blocked by adverse credit history can turn a recoverable situation into something much worse.

Some lenders do not insist on borrowers providing evidence of previous mortgage repayments and others will ignore cases where only a few mortgage repayments have been missed, if a plausible explanation is forthcoming. Being able to obtain a fast track remortgage can be a real lifesaver, if the existing lender is attempting to repossess the property because of mortgage arrears.

Poor Credit Remortgage Lenders
Potential borrowers should be aware that the specialist lenders who offer remortgages in the adverse credit market are not philanthropists. These lenders are in the market for commercial reasons, mainly that the rates of interest chargeable are higher than for more mainstream remortgages. As with any other mortgage, applicants should investigate what costs are associated with this type of loan and what will happen should they fail to make regular repayments. Repossession by the lender is the most likely outcome if the borrower defaults.

Summary
Some specialist lenders are willing to offer remortgages to people with adverse credit history;
County Court Judgements (CCJs) are not necessarily a bar to obtaining a remortgage;
the rate of interest charged on a poor credit mortgage is normally higher than on a conventional mortgage.