Bad Credit Remortgage

Podcast approved by The Openwork Partnership on 09/02/2025.

Lee McAteer explains how remortgaging works if you have bad credit. Episode one of two, recorded in January 2025.

Can you remortgage with bad credit?

Yes, you could. It just depends what bad credit there is and how recent that bad credit event happened. Everyone’s circumstances are going to be different with that. It will just depend on the details.

How can I remortgage with bad credit?

First of all, we need to have a look at your credit report to find out what bad credit is shown. From that, we could approach certain lenders that will accept your adverse events.

It’s important when it happened, how much it was for and whether it’s been satisfied. We’ve always got to look at your credit report before you start to remortgage with bad credit.

Can you be declined a remortgage?

You can certainly be declined a remortgage. A remortgage generally happens when you’re transferring from one lender to another.

If you’ve been missing payments on your mortgage, or on any other credit commitments, a new lender is less likely to take you on as a risk. You could be declined, but it depends on the circumstances.

Can you get a remortgage after bankruptcy or with a CCJ, IVA or default?

Yes, you could remortgage after bankruptcy or an Individual Voluntary Arrangement (IVA), and you could also remortgage while you still have a current County Court Judgement (CCJ) or default registered on your credit file.

Again, it depends on the amounts and the time lapsed since these events happened, in terms of when you could actually complete a remortgage.

Can you remortgage with a debt management plan?

You could remortgage with a debt management plan, in most cases. You need to have been in the plan for at least 12 months, because lenders want to see that you could keep up with the agreed payments within the debt management plan. So around 12 months from your plan starting, you could start to look to remortgage.

What deals and rates are available if you are remortgaging with bad credit?

It depends on your equity. When you purchase a property, you put in a deposit. When you’re remortgaging, we look at the amount on your mortgage against the value of the property. Your deposit turns into equity, and the lower the percentage of your mortgage to the property value, the better the deals from lenders are.

That’s because it’s a lower risk to them. Again, it depends on the circumstances and the amount of equity you’ve got in the property at the point when you’re looking to apply.

Are there many bad credit remortgage lenders?

Plenty of lenders will consider adverse credit, but it just depends on the amount, the event and the timing. The details around those will influence which lenders would accept you for a remortgage.

Is it better to improve my credit rating before remortgaging?

It’s always better to improve your credit rating, but it depends on the timing. When you’re looking to remortgage, it means your current deal is coming to an end. After that, you will revert to the lender’s standard variable rate, which generally is the highest rate of interest.

You don’t want to stay on that standard variable rate for too long – or ideally for any time at all. The sooner you could move, the better. If you improve your credit rating beforehand, brilliant, but it’s not worth being on the lender’s standard variable rate.

Speaking to a broker will give you the overall view on whether it’s the right time to remortgage or wait a little bit longer and improve your rating.

How do I improve my credit score or rating before a remortgage?

It’s simple really. You just need to keep on top of your payments. Make sure none of those are missed and you have direct debits set up. Look at your credit report and make sure everything on it is supposed to be there, check you’re on the electoral roll, and make sure you’re maintaining your contractual payments.

How do I apply for a remortgage with bad credit?

If you’ve got bad credit, lenders are going to look at your application in more detail. There have been issues, and lenders don’t want more issues going forward. They’re going to want to see more bank statements to get a good idea of whether you could afford the mortgage now and in the future.

They will make sure you’re not going to have the same issues you’ve had previously, whether that’s your fault or not. They do that by asking for more information, so speaking to a mortgage broker could help you and guide you through that process.

What else do we need to know before we come back with part two?

The main thing we’ve spoken about here is a remortgage, where you may need to go to an adverse lender that may not be on the high street. But if your mortgage is currently with a high street lender, you don’t necessarily need to leave.

If you’ve got bad credit, you could remain with your existing lender for something called a product transfer. This is an option if you don’t need to borrow any extra money or change the mortgage term – we could just swap that mortgage across for you with your existing lender.

More than likely, you’ll get the same rates as anybody else, as you’re up to date with your payments.

If you do need to remortgage or take a product transfer, speaking to a broker will guide you through the process and hopefully make your life easier.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 09/02/2025.