It’s not unusual for circumstances to change after taking out a mortgage, so don’t panic! In this article, we’ll focus mainly on negatively affected credit scores, but if your situation has changed in other ways – for example, your household income is less than it was when you took out your mortgage – then book in for a free consultation and we’ll help you make the right decisions.
The most common reason for a damaged credit score is missed credit card or loan payments. The first thing we would need to do is find out the details of those missed payments. Did they result in a CCJ? Or bankruptcy? Our next step would be to find out what you’re hoping to get from your remortgage. Are you simply looking to save money by not rolling onto your lender’s default rate? Or do you need to borrow more money? In this guide, we’ll explain everything you need to know about remortgaging when your circumstances have changes.
Remortgaging Without Borrowing More Money
You may be looking to remortgage so you can continue to pay a lower interest rate. This is almost always the right thing to do because rolling onto your lender’s default rate usually means much higher monthly repayments. If you’ve had some recent blips on your credit score though, you may be worried that doing this will end up costing you more, or perhaps result in you losing your mortgage altogether. This is extremely unlikely no matter how bad your circumstances, but we’re happy to chat with you and give you the right advice based on your situation.
In most cases, you’ll be able to remortgage to a new fixed rate with your current lender without any problems. The security is already done and locked on your property, so they’re unlikely to check your current salary. But remortgaging with your current lender will often result in a higher interest rate, especially if your credit score is worse than it was.
You may be able to find a better rate with a new provider. As impartial mortgage brokers, we have access to over 140 lenders, many of which specialise in adverse credit. Your initial chat with us is free, and we can explore all your options to try and find you a better rate. The great thing is, you’ll always have your current lender as a backup option. So it makes sense to speak with us first before accepting a higher interest rate from your current provider. The chances are we’ll be able to save you money.
Remortgaging and Borrowing More Money
Remortgaging is a great opportunity to borrow extra money at a relatively low interest rate. You may need to raise funds for home improvements or an important purchase, or perhaps you’re looking to consolidate debts. In fact, remortgaging can be a great time to start rebuilding your credit score by consolidating your debts into your mortgage and staying on top of repayments.
If you’re asking to borrow more money, providers are likely to take a closer look at your credit report and salary. This includes your current lender, so again, it makes sense to look at other providers first to see if you can get a better rate.
If you’re deemed to be a higher risk than you were when you took your mortgage, then you may have to accept a slightly higher interest rate. But even so, this will nearly always be lower than rolling onto your current lender’s variable rate.
How much you can borrow and at what interest rate is something we can work out for you once we know the details of your situation. It’s important you get professional advice before applying because being rejected for a remortgage can further damage your credit score.
Again, we have access to all the providers, including lenders who deal with poor credit. So we should be able to help you no matter how bad your circumstances. We’ll apply for you only when we’re confident you’ll be accepted, to protect your credit score from further damage.
The Bottom Line
Even if your circumstances have changed in a negative way, you should be able to remortgage. This could save you thousands in interest compared to rolling onto your current lender’s default rate.
You’ll likely get a better remortgage rate by moving to a new lender. Come and chat with us so we can work out your options and advise you on the best way forward. We only apply for products we’re confident you’ll be accepted for, so we protect your credit score from further damage.
Even if we’re unable to help you, you can still go on to your current lender’s variable rate, so you’ve lost nothing. But hopefully, we’ll find you a great product that ticks all your boxes and saves you money!
