How to Get a Remortgage with Bad Credit

A poor credit score rating can have a negative effect on your ability to borrow a loan or a mortgage. This can also extend to those individuals who are interested in remortgaging their home. If you are in the stage where you would like to remortgage your home, and you have poor credit, then it can be a struggle. However, you need not give up hope despite what most lending companies and brokers tell you. Some lenders understand the struggles of their customers and are willing to deal with borrowers who have a low credit score. The kind of loan you receive from such lenders is referred to as “bad credit remortgage” or “Sub-prime remortgage.”  This proves that it is possible to remortgage with bad credit; however, there are some factors you will need to consider to be in a position to receive the loan or mortgage for the apartment you are interested in purchasing. Some of these factors that you need to consider to get a remortgage with bad credit are discussed below in this article.

Apply with a lender who does not use credit score’s

A credit score is a computer-based number that most loan lenders use to assess home loan applications. These number comes from your credit report that has a history of your credit transactions. The data that is collected in your application or report is given a score, and if the computer system scores your application as bad risk then, your application will be declined before a real person even looks at your report.

Some lenders do not use credit scoring. By applying with such lenders, your report will be assessed by a real person and not a computer. The person assessing your application report will be able to evaluate your past & present personal situation and will use this information to judge whether you deserve to be given the remortgage. This can be a case of, “human says yes” and not,” computer says no.”

Make a Higher Down Payment

You can increase your chances of getting a loan or a remortgage by making a higher down payment. Making a high down payment will give some assurance to the lenders or brokers that they will get their money back. A higher down payment will mean that you will not have to pay private mortgage insurance.  If you don’t have enough money to make a high down payment, you can accept money from your friends or relatives. The money you receive from your friends or family needs must be in the form of a gift and not a loan. You will need to give a “down payment gift letter” to the lender of the remortgage company to prove it.

Co-Signer

You could avoid a bad credit mortgage if you find someone who can co-sign for your loan. You need to know that in these agreements you will be putting a friend or relative on the hook for your debt, therefore if you default both you and your co-signer will suffer the consequences.

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