Arrears on your current mortgage are one of the most negative signs on a credit history and the more recent the arrears the more of a negative effect they will have on your credit rating. It is always best to try and keep up with your mortgage payments and other existing debts. Here at First Choice Finance we are a mortgage broker with access to special mortgage plans that cater for people who may have a less than perfect credit profile, and can often help even if other mortgage providers can`t. In the event that we can`t help you we will happily look at your circumstances and can make recommendations to get back on track. For no obligation mortgage advice please complete our simple enquiry form at the top of the page or give us a call and speak to a qualified mortgage adviser.
How to remortgage with bad creditThere`s no doubt about it... bad credit scores can have a very negative impact on your remortgaging options. The common causes are simple and innocuous enough — maxing out a credit card, overdue payments, rolling interest build up, etc. Sometimes, it`s not even your fault you have a bad credit score! With identity theft on the rise, someone can easily get hold of your details and open new credit cards and make online purchases without you noticing anything. Whatever the reason, what`s clear is that bad credit significantly hinders one`s future financial and lifestyle choices.
But thanks to bad credit mortgages through First Choice Finance, it`s not impossible to restructure your finances. More and more Brits find themselves struggling with debts and less-than-perfect credit reports, so there`s been an increase of lenders and companies who cater to this segment.
In fact, there are many bad credit mortgages, ex-bankruptcy mortgages, debt consolidation packages and other offers that can provide consumers a way out of their money troubles. It`s difficult to say which company`s got the best deal. Choosing bad credit mortgages isn`t just a matter of finding the company with the flashiest or most convincing offers.
What`s important is that:
(1) you know your own credit history,
(2) try to improve your credit score - focus on clearing current mortgage arrears
(3) make lifestyle and spending habit changes, and then...
(4) shop around for the best bad credit mortgage most applicable to your financial situation.
First Choice Finance is a mortgage broker that gives you access to multiple lenders and we will search for a plan that best suits your individual circumstances.
Credit Reports – Where It All Begins... Any application for any form of credit, from credit card applications to car loans and bad credit mortgages, begins with the lender`s request to view the borrower`s credit history. The purpose of this is to judge whether the applicant is creditworthy enough to be trusted to pay back his/her mortgage. Obviously, bad credit mortgage lenders cater to those who are already considered `high-risk borrowers` with histories of delinquent financial behavior. Still, it does not mean that you will be denied for a bad credit mortgage. In short, your credit report is for the most part the `deciding factor` on whether you get approved for a bad credit mortgage or not but other factors can influence that decision. Good income to debt ratios and low loan to values being key areas.
What exactly is included in one`s credit report before it`s handed to lenders of bad credit mortgages? Every time a bill is paid - whether from retailers, lenders, credit card companies, court judgements, bankruptcies and foreclosures - information gets sent to credit bureaus, which then ‘tally` the information and create a credit report out of it.
Lenders of bad credit mortgages pay attention to your credit risk score. A credit risk score summarises the information contained in a credit report and is a quick and fairly accurate way to judge the financial status of the borrower. Lenders of different mortgages, and even those within a certain type such as bad credit mortgages, will look at the credit profile and score it in different ways depending on what they`re looking for and what underwriting guidelines they will be using.
What does remain stable, whether it`s premium or bad credit mortgages, is what these scores generally mean. For example (these are rough guides only): Anything above 680 is considered premium and renders the borrower more eligible for lower interest rates; 520 to 680 is considered good to fair; and anything under 450 is considered a poor score and might be acceptable only for bad credit mortgages.
It`s actually possible to have suitable credit and still have a poor credit score, thus leading to rejection from mortgage lenders other than those who offer bad credit mortgages. Not being on the voters roll is one such example. But even though bad credit mortgages do exist to address the needs of poor credit scorers, the goal should always be to constantly raise your score.
Why is it so important to know one`s credit history before getting a bad credit mortgage? - It`s already clear that it plays a big role in getting a mortgage lender to accept or decline requests for bad credit mortgages. But it should also be said that credit reports, whether they contain good or bad news, must be truthful and accurate to acquire the best bad credit mortgages.
Anything from circumstantial details about former partners or lodgers, to misspelled or misquoted contact information can have an effect on the credit report and rating, and thus, on the outcome of bad credit mortgage applications. To steer clear of penalties, make sure to regularly order a copy of your credit report and ensure that all the information there is correctly stated.
This way, when the time comes to apply for bad credit mortgages, there will be no need to worry about misunderstandings about suitable mortgage deals.
Taking Charge Of One`s Destiny While You Have Bad Credit
It helps to think of bad credit mortgages as just like any ordinary mortgage, albeit with a slightly higher interest rate. The fact is a lender of bad credit mortgages taking on a consumer with a credit score of 500 or below may saddle them with a greater risk than someone with a picture-perfect credit report bearing a score of 700+. This risk will usually be reflected in the rate you are offered.
This doesn`t mean however, that the borrower suffering form poor credit is condemned to a lifetime of high interest rates and ballooning debts. Even though lenders of bad credit mortgages unavoidably have to charge interest rates higher than the ones in mortgages enjoyed by premium credit scorers, bad credit mortgages are useful because they offer a chance to rebuild your credit.
So the financial past may not have been too rosy. So what? That shouldn`t be a hindrance to improvement. Lenders of bad credit mortgages understand that just because things didn`t work out before doesn`t mean that the consumer isn`t willing to change her or his fortunes for the better. So go ahead and get a bad credit mortgage and start rebuilding your finances.
Mortgages & Remortgages
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