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You CAN remortgage with bad credit-Refinance with poor credit

Updated on February 3, 2011

Mortgage refinancing with bad credit is not only very many cases it is the only solution available for most people. Whether you live in the United States or somewhere in Europe; all of us are dealing with the current financial stress brought on by energy companies, banks and governments and we are all looking for a way to not only survive but to maybe even still get ahead. The economic crisis has affected everyone in one way or another; some have had their salaries decreased, others are looking at a salary freeze and many families that had two incomes are now trying to make ends meet with only one. Many, many people are facing a real risk of losing their homes due to the rising cost of living (even during a recession), a decrease in income and more than likely the increasing amount of debt due to the frequent and necessary use of credit cards. 

     Because of all these, the amount of people seeking to remortgage their property despite a bad credit rating is immense. If you happen to be one of these people who are having difficulty keeping-up with your current mortgage payments or you simply desire to lower your home loan mortgage payments but you are concerned about your credit history being less than perfect, then you will be glad to learn that there are Poor Credit Remortgage lenders available with specific lending programs that can help you.

Basically a remortgage is a mortgage refinance; therefore simply put, a bad credit remortgage (also known as: Poor Credit Remortgage, bad credit remortgage, adverse credit remortgages, bad credit equity loan) is a mortgage refinance for someone who has bad credit. These types of remortgages are becoming very popular and a lot of lenders are offering competitive products so as to be able to cater to this increasing market. Mortgage Lenders are now quite aware of just how many homeowners are having difficulties with their finances and scores of them because of no fault of their own. Because the market is so viable there are many mortgage companies for people with bad credit. The competitive market creates opportunities to obtain a mortgage with a lower interest rate and pay off the previous loan even if you have bad credit. You can have this bad credit remortgage approved by your current mortgage holder or seek out a different lender, just keep in mind that the goal is to 1try to save money by acquiring a lower interest rate (if possible), 2lower your monthly mortgage payment and/or 3help a alleviate other pressing debts.


No doubt remortgaging your home can be very unsettling but when you considering the objectionable alternatives; claiming a bankruptcy and sacrificing all your hard earned assets or losing your home and having to live with relatives or worse yet on the streets; applying for a Bad Credit Remortgage becomes the only reasonable level-headed solution. You should not be embarrassed about applying for a Poor Credit Remortgage; everyone has had financial reversals at some point in their lives and had their credit history affected.

Strange as it may seem; in today’s society
                   “bad credit” is not the worst case scenario;
                                                fact is having “NO CREDIT” history is!

So don’t fret over having credit that is tainted; the fact that you have credit, whatever its rating, allows you options. Getting a remortgage with bad credit will avail you benefits you may not have considered; adverse credit remortgages can ease your current money troubles in two main ways.

  1. The first and foremost: you will have a lower house payment.
  2. The second advantage not to be overlooked is that you can consolidate all your other loans (including the credit cards) into a single payment...saving you wasted money on numerous interest payments.

According to statistics, even refinancing with bad credit can put you in a better position financially because you take control of the credit card debt that eats away at valuable resources that can be put to much better use.

Before the financial (banking) crisis a remortgage with bad credit was easily available – it wasn’t a matter of if you lived in London England, Los Angeles California, Dallas Texas, Marseilles France, Edinburgh Scotland, Chicago Illinois, Washington DC, Dublin Ireland or Boston Massachusetts - a remortgage with bad credit was available everywhere. It’s true that the financial situation of the world has changed; but don’t worry - you can still get home refinancing with bad credit. Bad credit remortgage loans have purposely been designed particularly for borrowers who are beset by poor or even bad credit.


When the economy was strong and vibrant, taking on a mortgage was not a problem. Your income was reliable and the bills got paid and you were able to gain some equity in your home. Then in a flash, situations in the world change your personal circumstances causing you financial unrest. Suddenly, that once easy to cover house payment becomes an overwhelming burden weighing you down month after month. Now, before events get out of control, you should be considering refinancing your home.

Refinancing with bad credit is not impossible, especially if you have already built-up some equity in your home. The equity in your property becomes the working capital for the other debts accumulated by credit cards and other personal loans. Yes, on paper it may seem that you still have the same debt (which in fact you do) but with two major differences:

  1. You now have cut down on the number of debt payments you are currently making each month, which usually means you can keep more of that cash for other purposes.
  2. You have eliminated the added interests from the loans and credit cards that were sucking money into oblivion with no benefit to you.

Your existing mortgage may have 10 years remaining but under your current financial conditions chances are you will default on your repayment contract and lose your home and worsen your credit rating for years to come. By working with mortgage lenders for people with bad credit, you may be able to stretch the life of your mortgage up to 15 or 20 years. In the long run you will probably be paying more for your loan due to an increase in your interest rate (however some lenders are so competitive that you might just happen to get a LOWER interest rate)...but your repayment period has been increased by 5-10 years (60-120 months) thereby lowering your monthly payments and making life easier and more hopeful.


Obviously no one is eager to jump into a home refinancing with bad credit, however, since you are already facing a bad credit rating and your financial conditions are not likely to change for the better before things get worse; applying to adverse credit mortgage lenders may be the best way to solve your problems Truth is: the people with a huge amount of credit card debt (most of that being the added-on interest charged by the credit card companies) helped to spur the surge of applications for remortgages and most of those were adverse credit remortgages.

In many cases the mortgage payment is jeopardized simply because of all the money you have to pay out each month on credit card bills. Consider this; most of us have multiple credit cards (Virgin Money, Capital One, Discover, Visa, MasterCard, MBNA, Bank of America and so on ) all carrying interest rates of or 14-25% or even higher. Very few of us realize how much extra cash we are giving away because of this. Take a look at your last credit card statement; take note of the balance from last month then notice the balance this month after you made your minimum payment. What you will learn is that very, very little of your payment comes off the principal balance. Most of the money you pay out the credit card bill is interest (free money for the credit card company). What is most astonishing and even sad, is that even if you do not charge one single dime more on your will be paying on these cards for the rest of your life (and they still won’t be paid off).

However, a bad credit remortgage can be used to pay off those credit cards or whatever other debts you may have (car loan, personal loans, unsecured loans, etc) by using the equity that you have built-up in your home in order to refinance your loan. Of course, this does not eliminate or lessen the debt but it does bring down the number of bills you will have to pay each month. Your remortgage interest rate may jump from 5% to 7% (hypothetically speaking, though it could actually go down!!) which is a great deal less that the extremely high interest rates of the credit cards. Not only will more of your money now be going toward settling your debt instead of the finance charges...but you also know exactly when it will be paid off.



Prior to applying for a bad credit remortgage lend you will need to have a few things prepared in advance, such as:

  1. Make sure that all your financial accounts are current and up to date, including; credit cards, utility bills and other loans. Any payments that have been missed or were late will be seen by the bad credit remortgage lender as unfavourable.
  2.  It is also wise to keep your spending for the month down to a minimum before going to any adverse credit mortgage lenders; doing this will show the lender you are responsible with money. 
  3. You will need to provide a proof of income so that an income–to-debt ratio can be determined.
  4. The lender will want to see your past bank statements to view your spending habits. This will give them a general idea of your financial responsibility. Even people with good credit ratings get turned down for mortgages simply because of bad spending habits.

Your current financial situation will be taken into consideration by the adverse credit mortgage lenders and as long as you qualify for the loan they will be able to set-up terms and conditions that can fit your particular needs.


Besides the reason stated above, there are numerous other reasons why one would opt for a bad credit remortgage loan.

1.To use equity built up in the home to consolidate or pay off debt.

2. To obtain a lower interest rate

3. For a lower monthly mortgage payment

4. To improve credit score

5. To pay for big expenses such as a wedding or college tuition

6. To repair or remodel the existing home

7. To have the option of a longer time period to pay the loan

8. For the ability to convert a variable interest rate into one that is fixed


Today, there are numerous financial institutions, companies and lenders who have built loan societies that are more than willing to make available bad credit remortgage loans. Nevertheless, before choosing a lender, you should verify a few things about them.

  1. The lenders must be fully authorized and reputed within the financial market.
  2. The lenders should be able to guarantee the terms and conditions of the loan agreement fully.
  3. Before making any final decisions with whom you will apply for your bad credit remortgage, it is important to compare rates among the various lenders and to do some research on the companies reputations.

Even in the best of times, having bad credit can make it very difficult in securing a loan and fulfilling financial obligations. Though in bad times new markets are created because of the overwhelming need for assistance; mortgage lenders realize that adverse circumstances can happen to even the best of people and to even more during adverse times. Adverse credit mortgage lenders are eagerly looking for new business and the competition to get yours makes your chances of getting a loan with a good rate and agreeable terms very good.


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    • profile image

      Ms. May 

      6 years ago

      I need to refinance with cash out to consolidate my bills. I'm behind in my mortgage payment due to advice from a lawyer which I ended not going through with because I have too much equity in my home to file a bankruptcy. I was told to stop paying my bills. My mortgage company refuses taking my three back payments because I didn't have enough money to pay the late fees that were tacked on. So, what do I do?


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