Yes, it is possible to remortgage your UK property with a lower interest rate even if you have bad credit. However, it may be more challenging to secure a favourable deal. Here are some steps you can take to increase your chances of successfully remortgaging with a lower interest rate:
1. Understanding Bad Credit and Remortgaging
Before you start the process of remortgaging, you should know how your credit score affects your mortgage options. Your credit score is a reflection of your financial history and indicates your creditworthiness. Lenders use this information to assess the risk of lending to you.
Bad credit can result from late or missed payments, defaults on loans, County Court Judgements (CCJs), or bankruptcy. Because of these things, it’s harder to get a new mortgage with a lower interest rate. However, it’s not impossible.
2. Specialist Bad Credit Mortgage Lenders
Working with a specialist bad-credit mortgage lender can help you get a remortgage with a lower interest rate if you have bad credit. These lenders work with people who have bad credit, so your application is more likely to be considered.
Keep in mind that specialist lenders may charge higher interest rates and fees than traditional lenders, but they might still offer a better deal than your current mortgage.
3. Improving Your Credit Score
Taking steps to improve your credit score can make it easier to get a remortgage with a lower interest rate. Some ways to boost your credit rating include:
* Ensuring you’re on the electoral roll
* Paying your bills on time
* Reducing your outstanding debt
* Regularly reviewing your credit report and correcting any inaccuracies
Remember, improving your credit score is a gradual process, but it can significantly increase your chances of securing a favourable remortgage deal.
4. Using a Mortgage Broker
If you have bad credit and want to get a remortgage with a lower interest rate, a mortgage broker can be a great help. Mortgage brokers have access to a wide range of mortgage products and specialist lenders, which can increase your chances of finding a good remortgage deal.
Additionally, mortgage brokers can offer personalised advice and help you navigate the application process, which can be particularly beneficial if you’re dealing with a complex financial situation.
5. Consider a Guarantor
If you have bad credit and are having trouble getting a remortgage, you might want to find a guarantor. A guarantor is someone who agrees to be responsible for your mortgage payments if you fail to meet them. Having a guarantor with a strong credit history can improve your chances of securing a remortgage with a lower interest rate. But this option is risky for the guarantor, so it’s important to talk to them in an open and honest way about what could happen before moving forward.
While remortgaging with a lower interest rate can be more challenging for UK homeowners with bad credit, it is not impossible. By working with specialist lenders, improving your credit score, using a mortgage broker, and considering a guarantor, you can increase your chances of securing a favourable remortgage deal. Remember, your financial situation is unique, and it’s essential to seek professional advice before making any decisions regarding your mortgage.