Kristian Derrick, Author at Mortgageable

Debt Consolidation Remortgage UK

by Kristian DerrickPosted on 27th December 2018 | Updated 16th March 2023

You’ll usually pay higher interest rates on unsecured borrowing than secured borrowing.

So if you’re stuck paying high levels of interest on your debts, it could be worth looking into a debt consolidation mortgage.

What is a debt consolidation mortgage?

Are you struggling to make ends meet each month?

If your debt just doesn’t seem to be decreasing, it’s probably because the payments you’re making are just covering your interest payments, and not the debt itself.

In some cases, it can take years to pay off a credit card if you’re only able to make the minimum monthly repayments.

A remortgage for debt consolidation allows you to take out a mortgage large enough to pay off an existing mortgage, while also covering all of your existing debts.

How does it work?

In order to qualify for a re-mortgage, the lender will take into account the following:

Your credit report and any current debts you hold.
The value of your property.
How much of the property you own.
The amount you want to borrow vs your income.

Typically, lenders will also request you to agree and sign an undertaking drawn up by a solicitor before approving the remortgage.

An undertaking is an agreement that you will repay the debts in full upon the release of the funds, however, if your income is sufficient to make the repayments itself, then this won’t usually be necessary.

Note: If your current mortgage interest rate is highly competitive and you do not want to lose it, then a remortgage may not be the best option for you and you may also want to consider a second charge loan.

Why would you consolidate your debts into a mortgage?

By consolidating your unsecured debt next time you remortgage, you can quickly reduce your monthly outgoings and comfortably pay back what you owe in a realistic time frame.

The main benefit of a debt consolidation mortgage is a dramatic decrease in interest rates.

The other benefit is streamlining your payments into one monthly instalment, so there’s no need to worry about numerous payments over the course of the month.

And there’s no need to worry about receiving a CCJ or IVA in the future.

With a debt consolidation mortgage, you could pay off the following types of unsecured debts:

Credit cards.
Personal loans.
Payday loans.
Overdrafts.

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Is a debt consolidation mortgage a good idea?

For many individuals, a debt consolidation mortgage can certainly be a good idea, but it should be something that is considered with care.

Even though consolidating multiple debts is attractive as it can convert your debts into a single instalment and reduce your rate of interest, there are some key things to be aware of and so you should always seek professional advice first:

There may be cheaper alternatives than a remortgage, such as balance transfer credit cards.
Transferring unsecured debts into a secured debt against your home means that your property acts as collateral and so is at risk if you fail to keep up with repayments.
Although the interest rates on a mortgage can be lower, they are usually much longer, so you may end up paying more. By adding other debts onto your mortgage, you may end up paying interest on them for a longer period of time.

How much can you borrow?

The amount you can borrow will be dependent on the amount of equity in your home, current debts, credit history, as well as whether or not you meet the lenders affordability criteria.

Your debt-to-income ratio may also be taken into account, though each lender will allow you to borrow in line with the specified limits.

For example, some lenders may allow you to borrow as much as 90% of the loan-to-value (LTV) ratio for properties exceeding a valuation of £500,000 and over, while others may only allow you to borrow a specified amount e.g. £20,000.

Other lenders may be more focused on how your original debts were gathered in the past and base their decision on a case by case basis, rather than your debt-to-income ratio.

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Debt consolidation vs. Second Mortgage

The main distinction between a debt consolidation mortgage and second charge mortgage is that a second charge mortgage is essentially a secured loan, which uses your home as security.

A debt consolidation remortgage puts your mortgage on a new deal and releases equity to pay off the debts.

A second charge mortgage means you will have a first mortgage/first charge loan, as well as the second mortgage that can be used to pay down debts.

The main advantage of a second charge mortgage is that it allows you to keep your mortgage and the associated interest rate, so is ideal for those wanting to keep their current interest rates.

How can I consolidate debt as part of my mortgage?

There are two main ways to consolidate your debt with your mortgage.

Remortgage your entire debt over to a new mortgage lender. This method lets you arrange a new mortgage for the value of your current mortgage, added to the debt you have. For example, if you have a mortgage to the value of £150,000 and debts of £25,000, you would take out a new mortgage with a new lender for £175,000. If you own a property where you have a suitable amount of equity, this is a useful solution. By doing this, you can also release equity which will allow you to pay off some of the money you owe using a lump sum. At the moment, with some lenders, the maximum Loan to Value (LTV) ratio allowed to do this is 90%. This means that if you own a home worth £100,000, the maximum you could borrow (including your existing mortgage) would be £90,000. If you want to pay less and lower your monthly payments, this is a good option because the mortgage rate will usually be the best available to you at the time.
Take out a new loan secured on your current mortgage. With this method, you’ll essentially have two mortgages on your home. For example, you might decide to keep your current £150,000 mortgage and also take out a new secured loan for the value of your £25,000 debt. If you choose this option, it’s worth remembering that your monthly repayments probably won’t drop as considerably. This might also be a better solution for those with a poor credit rating, or those who want to retain their current mortgage deal.

Things to consider before consolidating your debt into your mortgage

There are several things to consider when looking at consolidating your debts into your mortgage, such as the following:

The amount of equity in your home – some lenders may consider a 90% LTV remortgage, however in most cases, 85% is the maximum LTV for debt consolidation, so you need to ensure you have enough equity in your home currently to cover your debts. The lower your current LTV, the better as otherwise you may enter the next LTV band meaning a higher mortgage interest rate. Work out your current LTV, and what your LTV will be once you’ve added your debts to your mortgage, and if it is 85% or under then you may be able to get a debt consolidation remortgage with us.
Check if your current deal allows additional borrowing on your mortgage – if you can get extra borrowing on your mortgage, find out if there are any fees and rates available.
Check if you can remortgage now – if you’re in the middle of a fixed rate, you may have to wait until the end of that term before you can apply for additional borrowing to avoid paying early redemption charges; so be sure to check the terms and conditions of your current mortgage deal. If you’re at the end of a fixed-term mortgage (such as 2 or 5 years), you may be able to remortgage with another lender and not incur early repayment charges.
You’ll be paying the debt over a longer-term – your monthly payments will be considerably lower, however as they’ve been added to your mortgage term, it’s likely you’ll be paying the debt over a longer period than the initial terms of your unsecured debts.

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What type of debts can I consolidate with a remortgage?

Typically, most unsecured debts can be consolidated when you remortgage.

Examples include:

Credit cards.
Unsecured personal loans.
Car finance.
Hire purchase agreements.

Some lenders ask for proof that the debts have been paid as part of the conditions of the mortgage offer, so be sure to get confirmation that the debts have been paid in case you’re asked for proof in future.

Note: Bad credit commercial mortgages are also useful for those looking for commercial properties with a poor credit history.

Can I get a debt consolidation remortgage if I’ve got a bad credit history?

Depending on the severity of your credit history, you may be able to find a lender that suits your needs.

If you’ve had a few late credit card payments, in theory, you’ll have more disposable income every month and the debt is secured, so you’ll be deemed less of a risk compared to more unsecured borrowing.

Lenders will like to see a history of payments being kept up to date, so ensure that for at least 6 months before your application that all payments are made on time.

We’ll help you find the right mortgage deal as we have access to over 80 lenders, so get in touch today to begin your debt consolidation remortgage application.

Mortgage Rates for Debt Consolidation

If in a considerable amount of debt many people attempt to clear it using a loan or a credit card, but the issue is that these generally have high-interest rates, so are not the best option for an individual already indebted.

An alternative route is to opt for a remortgage or a secured loan instead.

Since these are secured against your home, the interest rate offers you will receive are typically lower, allowing you to reduce your monthly outgoings and manage your debts better.

By consolidating all of your debts into a single loan, you will most likely reduce the amount of interest you will pay.

This means your debt will likely be easier to manage and pay off, making it less of a weight on your shoulders.

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How do I know if a debt consolidation remortgage is the right choice for me?

If you’re struggling to keep track of your monthly payments, or you’re finding it difficult to make ends meet, a debt consolidation mortgage might make life easier.

Always think carefully before securing debts against your home, and bear in mind that in some cases, you might still end up paying more over a longer period of time.

Remortgage for debt consolidation Summary

We have access to more than 90 lenders, and we know a thing or two about debt consolidation mortgages.

If you’d like to talk to us about your circumstances, you can contact us on 01925 918960 or complete our quick Debt Consolidation Application Form and we’ll be in touch.

One of our friendly advisors would be happy to help you.

Mortgage Brokers/Advisors Warrington

by Kristian DerrickPosted on 22nd November 2018 | Updated 11th November 2022

We have more mortgage advisors than Warrington has postcodes, but what makes us unique is that each and every one of our experienced advisors is emotionally invested in your mortgage application.

Mortgage brokering is a skilled craft – a blend of know-how, experience and most importantly an understanding of people and their individual requirements… and our advisors offer combined experience of well over 100-years but it’s a dash of Warrington locality that brings everything together for true peace of mind. It’s true, we have more mortgage advisors than Warrington has postcodes

Knowing your mortgage advisor is at the end of your road and not just at the end of a phone is a blessing that cannot be understated during the undeniably stressful time of buying your dream home that you’ve now viewed 78 times. Even if that road is Winwick Road. On a Saturday.

Lender Blender

We’ll tenaciously scour the world of mortgages, upturning over 20,000 packages including exclusive deals that other brokers can only dream of having access to in order to find you a mortgage so suitable, you’ll want to do it all over again.

How Average House Prices have changed in Warrington over the years:

	2015	2016	2017
Warrington, WA1 1	£94,900	£108,000	£143,000
Warrington, WA1 2	£127,000	£102,000	£114,000
Warrington, WA1 3	£156,000	£171,000	£172,000
Warrington, WA1 4	£156,000	£179,000	£182,000
Warrington, WA2 0	£138,000	£146,000	£147,000
Warrington, WA2 7	£90,400	£96,800	£97,300
Warrington, WA2 8	£178,000	£205,000	£212,000
Warrington, WA2 9	£96,900	£101,000	£110,000
Warrington, WA3 1	£178,000	£190,000	£197,000
Warrington, WA3 2	£170,000	£158,000	£183,000
Warrington, WA3 3	£110,000	£120,000	£117,000
Warrington, WA3 4	£335,000	£359,000	£335,000
Warrington, WA3 5	£207,000	£198,000	£217,000
Warrington, WA3 6	£147,000	£157,000	£177,000
Warrington, WA3 7	£265,000	£233,000	£234,000
Warrington, WA4 1	£140,000	£141,000	£126,000
Warrington, WA4 2	£251,000	£259,000	£269,000
Warrington, WA4 3	£255,000	£292,000	£307,000
Warrington, WA4 4	£367,000	£339,000	£343,000
Warrington, WA4 5	£418,000	£404,000	£490,000
Warrington, WA4 6	£214,000	£234,000	£226,000
Warrington, WA5 0	£94,000	£97,200	£101,000
Warrington, WA5 1	£124,000	£132,000	£136,000
Warrington, WA5 2	£177,000	£165,000	£206,000
Warrington, WA5 3	£180,000	£210,000	£200,000
Warrington, WA5 4	£129,000	£160,000	£134,000
Warrington, WA5 7	£227,000	£232,000	£244,000
Warrington, WA5 8	£198,000	£230,000	£230,000
Warrington, WA5 9	£179,000	£174,000	£178,000

Figures shown are the average sold prices for all homes in the postcode for the duration of the year. Figures supplied by http://a.plumplot.co.uk

“Mortgageable boasts a small army of highly qualified, Warrington based mortgage advisors with the steely determination of starving honey badgers and hearts warmer than loyal guide dogs”

“Jo managed to switch my mortgage to another lender knocking 5 years off my mortgage whilst keeping my payments exactly the same! Amazing”

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All-inclusive. But Not Illusive.

Re-mortgaging, first time buying, buy-to-let, or bad credit applications. We’re securing mortgages for people in Warrington like they’re going out of fashion.

Start your mortgage application here, it only takes a few minutes and then one of our local advisors will call you. Simple.

Our Warrington Office:
First Floor, 1 Station Road, Great Sankey, Warrington, WA5 1RH.

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What credit score is needed to buy a house in the UK?

by Kristian DerrickPosted on 8th November 2018 | Updated 20th January 2023

If you’re in the UK, there is no minimum credit score that you need to buy a house.

There is no “holy grail” number that your score needs to reach in order to qualify for a mortgage.

This is because there is no universal credit score. In fact, your credit rating can even vary between different lenders and credit reference agencies.

In this post, we’ll explore credit scores in more detail, and explain how you can improve your score to get the mortgage you want.

How does my credit score affect my mortgage application?

When you apply to take out a mortgage (or any other type of loan), lenders will look at your credit score.

This will help them to determine how much risk is involved when lending to you. Are you a reliable borrower, or will you struggle to repay the debt?

Normally, a high credit score means you’re a low risk borrower. In this case, you’ll often be accepted for a mortgage, sometimes even with a better interest rate than someone with a lower credit score.

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How much does my credit score matter when applying for a mortgage?

Yes, it’s important, but getting approved for a mortgage isn’t all about your credit score.

Mortgage lenders want to check that you can afford your mortgage repayments before they agree to lend you any money.

Alongside looking at your credit history, they’ll also take into account how much you earn. They’ll even assess other monthly costs such as childcare and transport, to ensure that you can afford the mortgage repayments.

It’s also worth remembering that lenders may be more willing to lend to you if you are able to put down a large deposit. If you’re only able to put down a small deposit, lenders may require a higher credit score to make up for it.

Recommended reading: What are the different types of mortgages and what fees are involved in buying a home?

Types of First Time Buyer Mortgages

For a more in-depth look into some common types of first time buyer mortgages, check out our following guides:

How can I improve my credit score?

If your credit score is low, there are plenty of things you can do to try and increase it before applying for a mortgage.

Whether it’s simply making sure that you’re registered on the electoral role, or checking for errors in your credit report, you’d be surprised how much the little things can make a big difference.

The main things to consider when looking to improving your credit score are:

Make sure you’re on the electoral roll.
Ensure all your bills are paid on time.
Check if there are any mistakes or incorrect financial links to other people on your credit reports.
Avoid several credit applications in a short space of time.
Try and reduce your levels of debt before applying for a mortgage.

It’s also important to prove to lenders that you’re capable of managing your finances, especially if you are a first time buyer. If you always pay your bills and pay off your credit card balance on time, your credit score will slowly begin to rise.

If you want to speak to us about applying for a mortgage, one of our friendly advisors would be happy to help. You can contact us on 01925 918960.

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Mortgage Declined by Underwriter – What Next?

by Kristian DerrickPosted on 8th November 2018 | Updated 20th January 2023

Why has my mortgage application been declined?

So you’ve found the perfect house, but you aren’t able to secure the mortgage you need as your mortgage application was declined by the underwriter.

Not only is this a massive inconvenience, but it can also stop your house hunt in its tracks.

If you’ve been refused a mortgage, don’t panic.

There are a number of reasons why your mortgage application might have been declined.

We can help you to get to the bottom of it.

Mortgage declined by underwriter

There are several reasons why a mortgage can be declined by the underwriter.

It can be due debt, having a poor credit score, failing mortgage affordability checks or simply completing your mortgage application incorrectly.

With that said lenders can refuse your mortgage application for a whole host of different reasons, in this guide we explore some of the most common reasons for an underwriter declining a mortgage:

Why was your application declined and potential solutions:

The problem: Poor credit history. It’s a good idea to check your credit report to see if there are any errors that you need to flag up.

The solution: Correct any errors on your credit report, and focus on improving your credit score. Check out our bad credit advice guide for more helpful tips.

Top Tip: Take a free look at your credit score today, visit noddle.co.uk for a free trial.

The problem: High levels of debt. If your lender thinks you’re already struggling to pay back what you owe, they might feel wary about offering you a mortgage, especially if you have something like a CCJ or an IVA.

The solution: Focus on paying off your debts before your next mortgage application. If a lender can see that you’ve actively reduced the amount you owe, your application will seem less risky.

The problem: Too many credit applications. Most credit searches will leave a footprint on your file. If you’ve repeatedly applied for credit, lenders may see it as a red flag and may decline your mortgage application as a result.

The solution: Try to avoid taking out any credit deals before your next mortgage application. Don’t apply for any credit cards, and don’t buy anything on finance.

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The problem: Low salary. Quite simply, some lenders might think that you don’t earn enough to qualify for the amount of money you want to borrow. This is one of the reasons most lenders require a large deposit.

The solution: Aside from bagging that big promotion, you might need to request a smaller mortgage, or look into one of the government’s shared ownership or help to buy schemes.

The problem: You don’t match the lender’s profile. It’s true, some lenders prefer to offer mortgages to a specific demographic. If you don’t fit their criteria, they might reject your mortgage application.

The solution: That’s where we come in. With access to lenders across the board, we can guide you in the direction of a lender who is willing to lend to YOU.

Mortgage application declined by underwriter – Final take

If your mortgage application has been refused, all hope is not lost.

You may need to wait a little while longer, but chances are you’ll still be accepted for a mortgage in the future.

To reduce the risk of being refused a mortgage for the second time, it’s a good idea to get advice from a mortgage broker (like us).

We have access to a huge selection of lenders, and we know which lenders are most likely to offer a mortgage to fit your circumstances.

Bear in mind that if you do have poor credit, then you will likely be offered a mortgage at a higher interest rate.

Note: Are you looking for commercial property but have a bad credit history? Bad credit commercial mortgages may be an option for you.

If you’d like to talk to us about your next mortgage application, you can contact us on 01925 906 210 or fill out our contact form.

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Self Employed Mortgage Broker

by Kristian DerrickPosted on 28th August 2018 | Updated 20th January 2023

The number of people in self-employment has risen sharply in recent years.

As the number of self-employed borrowers has grown, so has the difficulty in getting a mortgage offer.

We’re not going to lie to you, there are a few hoops to jump through if you want to get onto the property ladder.

It’s important to get all of your ducks in a row before you begin looking for the right mortgage. But don’t worry, all the planning will pay off.

What counts as being self-employed?

Lenders may class you as self-employed if you own around 25% of a business or more.

If you are in a partnership or are a sole trader, your lender will view you as being self-employed.

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How to get a mortgage Self Employed

Can you definitely get a mortgage if you’re self-employed?

Yes, but you’ll need to meet the following criteria first.

Typically you will need to have at least two years’ worth of accounts or self-assessment tax returns available to show to your lender. In some cases, you might need to provide up to three years’ worth.

You may find that some lenders are stricter than others, too. Some might want to see a projection of your future earnings in the form of upcoming contracts, while others will be happy with just one year’s worth of accounts.

As a general rule, lenders are simply looking for evidence of reliable earnings and regular records of your income. Crucially, they need to be confident that you can sustain your current level of income in the years to come.

Self employed mortgage without proof of income

No matter your situation, lenders will always require you to provide proof of income as part of the mortgage application.

This is essential since lenders will want to a mortgage applicants affordability, which needs to be recorded.

Therefore, the answer is that you will have to present proof of income. Interestingly, in recent years there has been a move to request proof of income directly from HMRC, so you may not always be asked directly to provide proof.

However, this is by no means standard practice, but it is becoming more common as it helps lenders save a considerable amount of time when assessing mortgage applications.

The good news is that as mortgage brokers, we are well versed in how to document proof of income prior to application submission.

Self Cert Mortgages – are they the same thing?

For many years, a type of mortgage referred to as a self-cert mortgage was available for the self-employed, it was later opened up to other individuals who had complex incomes.

Self-cert mortgages were at incredibly popular and many people took advantage of the scheme, however, the financial regulator soon decided that they were too risky and the rate of defaults was too high, therefore they were officially axed.

As a result, self-cert mortgages are no longer available in the UK.

How much can you borrow with a self-employed mortgage?

Mortgage lenders do not all assess personal income the same way and as a result, they can come to different income figures.

For example, some lenders may base it on your most recent annual income, while others may base it on an average of the past few years.

They may also consider and apply a different weight to your direct income, salary, dividends and other investments you may have.

Ultimately, there is no one main method that lenders use across the board to conclude your personal income. Although, the good news is that once that figure has been determined, they will use the rules they apply to everyone else that applies for a mortgage through them.

Getting a Self Employed Mortgage

There are plenty of things that you can do to make yourself look more attractive to lenders. Here’s what we’d suggest if you’re planning to make that first step onto the property ladder.

Employ a chartered or certified accountant. Most lenders will insist that your accounts are prepared by an accountant. There is also the added bonus that you won’t have to do your own accounts anymore!
Avoid spending on “red flags”. Things like online gambling websites and payday loan companies are big red flags for most lenders. Steer clear of these.
Enlist the help of a mortgage broker. This is one of the best things you can do when you are self-employed and looking for a mortgage. A broker will be able to point you in the direction of the lenders that are most likely to give you a good rate, saving you a lot of time and money.

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Self Employed Mortgage Broker – I want to Speak to Someone?

Now that you fit all of the criteria above, it’s time to start looking for a mortgage.

If you’re self-employed and ready to buy your first home, you probably have a tonne of questions.

Get in touch and we can walk you through the process, helping to find the right lender for you.

Alternatively, complete our simple application form here and we’ll be in touch.

Remortgage with Bad/Poor Credit UK

Kristian Derrick

by Kristian DerrickPosted on 28th August 2018 | Updated 27th July 2023

How can you remortgage your home if you have a poor credit score?

We won’t beat around the bush.

Yes, bad credit remortgages can be difficult but don’t worry. It isn’t impossible to get a mortgage with a bad credit rating.

There are lenders out there who will consider you for a remortgage application, even if your credit history is less clean and more colourful.

Can I Remortgage With Bad Credit History?

Yes, absolutely.

It is important to remember that some “blotches” on your credit report carry more weight than others and it’s still possible for you to remortgage with bad credit.

Lenders are more likely to be lenient if you missed a bill payment a couple of years ago, with a good explanation.

On the other hand, if you’ve recently missed more than one mortgage payment in a row, lenders may be less likely to believe that you’re able to keep to your repayment schedule.

Luckily, each lender has different criteria for assessing your credit score.

In fact, you might be pleased to know that some lenders don’t actually credit score at all.

This means that even if your current mortgage provider may not offer you a new rate, another lender out there might. It’s all about finding the right lender for you.

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Will owning my property outright make a difference?

Typically not.

This is usually referred to as an unencumbered mortgage and faces the same requirements as a standard remortgage.

It’s largely dependent on your reason for remortgaging.

Ultimately, bad credit remortgages on unencumbered properties are placed under the same scrutiny as a standard mortgage.

Bad Credit Remortgages – reasons for remortgaging?

There are plenty of reasons you might want to remortgage, even if you do have bad credit.

These could include:

Debt consolidation. This is when you want to add your existing debts to your monthly mortgage payment. This can often result in a lower interest rate on your other debts, enabling you to pay them off quicker.
Home renovations. If your home is in need of some serious TLC, remortgaging can be a great way to raise the funds for an extension, essential repairs or even that much-needed new kitchen.
A considerable purchase. Maybe you’re in desperate need of a new car? Or want to buy a new property? If you need money for a large purchase, remortgaging can be a good option.

There are many other reasons, check out the most common reasons for remortgaging in recent years article, for a summary.

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What would be classed as adverse credit on your credit file?

Your bad credit rating could be the result of a number of things.

Perhaps you’ve previously missed bill payments or had mortgage arrears.

You might even be using a debt management plan to repay what you owe.

Each adverse event on your credit record will have a different effect on your credit report.

The more blotches you have on your record, the more reluctant banks may be to lend to you.

Our advisors have arranged for people with bad credit remortgages in the following circumstances:

Low credit score
Late payments
Mortgage arrears
Defaults
CCJs
Debt management plans
IVA
Bankruptcy
Repossession

Each blemish or adverse credit event you’ve had will be shown on your credit report and impact your credit score.

It’s still possible to remortgage with bad credit, but it will be more difficult.

The difficulty of the application will depend on factors such as the types of events when they occurred and how much equity you have in your property.

Lenders take your credit history into account since a borrower that has had credit issues in the past is more likely to have issues in the future.

If you’re going to apply for a remortgage with bad credit, lenders may be less inclined to approve the application and if they do, they will usually offer a subprime rate.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

However, that isn’t always the situation. It all depends on your individual circumstances, which means there may be more options available to you than you first thought.

Our brokers will be able to assess your situation before finding a lender to suit your circumstances.

Not only does this help to protect your credit rating, but it also saves you a lot of time.

Related quick help remortgage guides:

If you would like to learn more about how lenders view specific adverse credit situations and how specialist lenders can help, continue reading on for further details.

The important thing to remember is that if you are making an application for a remortgage and have some kind of bad credit on your file, even specialist lenders will likely be more cautious.

As part of the decision process, lenders will consider the following:

The loan-to-value, or LTV – this is basically the size of your mortgage balanced against the value of the property you want to purchase. This term is often given as a percentage. For example, the greater the deposit you provide and the greater the equity in your property, the lower your LTV and the better mortgage terms you are likely to be offered.
Deposit – the higher the deposit you can offer, the better mortgage offer you are likely to receive.
Income – the amount you want to borrow vs how much you earn is an important consideration. Typically, the majority of lenders will only lend around 3.5 times your annual salary.

Of course, there are other factors that will relate to your specific circumstances, including your credit history and current financial status.

Let’s explore how some common bad credit scenarios can impact your application…

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Can I Remortgage with no credit history?

With no credit history, this means that you essentially have nothing on your credit report, as you have borrowed no money in the last 7 years.

No credit history can read the same way as poor credit when it comes to remortgaging.

Can I Remortgage with a low credit score?

All lenders will take a look at your credit history before making a decision on your eligibility for a remortgage.

A low credit score or poor credit history will certainly affect your chances of securing a loan with most lenders.

This doesn’t mean that you won’t be able to remortgage with a low credit score, it just means that you will need to go through a specialist lender.

There a number of lenders out there that will specialise in poor credit remortgages, so speak to a whole market mortgage advisor.

This is instead of putting applications in with numerous banks which may further adversely affect your credit rating.

Can I remortgage with late mortgage payments or missed mortgage payments?

Mortgage arrears can be a serious issue if you are hoping to remortgage, especially if there are other poor credit issues to consider.

This is because late or missed mortgage payments are deemed as the most severe kind of default, indicating a real risk in the ability of a lender to make their repayments.

Your eligibility for a remortgage with arrears will depend on how historical they are and the size of the deposit you have.

There are poor credit mortgage lenders out there that can help you remortgage even if you have recent arrears on file.

Can I Remortgage with CCJ’s?

There is an increasing number of lenders that will consider those with County Court Judgements (CCJs).

Having a CCJ doesn’t prevent you from remortgaging, with the key factor being the date of the CCJ.

The longer ago the CCJ was issued the better your chance of being accepted for a remortgage.

The number of CCJs and whether they were satisfied or unsatisfied will also be taking into consideration for a poor credit remortgage.

Can I Remortgage with IVAs?

The eligibility criteria for a remortgage with an Individual Voluntary Arrangement (IVA) will differ depending on whether you have a current IVA or a historical one.

Being in a current IVA can put a limit to your remortgaging options, but lenders can be more flexible as you are not applying for new credit.

It is certainly possible to remortgage whilst in an IVA or to even pay off an IVA.

However, if you are hoping for an IVA remortgage, you will need to show a lender that you have been making mortgage payments throughout the IVA for the previous 12-24 months.

Speak to a lender or advisor who has expertise in bad credit mortgages to better determine your own eligibility.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

Can I Remortgage with debt management schemes?

If you are thinking about remortgaging to help pay off your debt management plan, you will have to consider whether you meet the right criteria before proceeding.

When remortgaging the LTV (Loan-To-Value) is at around 80% in most cases, so if you do not meet this requirement, you will be unlikely to be able to release any equity via a remortgage.

Even if you own a larger portion of your home, say 50%, you will still need to show a lender that you can afford the repayments during the debt management scheme.

If you have completed a debt management plan, you will probably find it easier to remortgage, but you still may have to go through a specialist poor credit lender.

Related reading:

Can I Remortgage with Repossessions?

If you have had a home repossessed in the past that doesn’t mean you cannot remortgage in the future.

You simply need to look at specialist bad credit mortgage lenders and show that you can meet the criteria in terms of deposit and affordability.

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Can I Remortgage with Bankruptcy?

When it comes to bad credit issues, bankruptcy is one of the most serious ones for lenders.

Luckily, there are a number of mainstream and specialist lenders that will consider remortgage with bad credit for those that have been declared bankrupt in the past.

For more information on bankruptcy remortgages, get in touch with us today and discuss your options

Can I Remortgage with Payday Loans?

These high-interest loans are never a smart way to build up your credit rating and you should know that mortgage lenders do not look upon them favourably at all.

Payday loans are differentiated from other forms of credit on your credit report, so lenders will know how often you have used these loans in the past.

Often, lenders will see using payday loans as a sign you can’t manage your money, so will have a significant impact on your creditworthiness, meaning you’ll have to look at poor credit lenders.

Remortgage rates if I have bad credit

If you have a bad credit score, then it’s typical that you will be offered mortgage deals with a higher than the average interest rate.

However, it really depends on the amount of time that has passed, for example, if it was a late or missed payment on a bill from a few years ago, the chance of it having a major impact on the interest rate is low.

Yet if it was recent and a major event such as a repossession order or CCJ, then it is likely to have a significant influence on the interest rate offer you receive.

If you still have debts to repay, such as a CCJ or IVA, then this will typically restrict the number of mortgage offers open to you and inevitably have an influence on the interest rates.

The more time that has passed since the poor credit event and the more that you have demonstrated your willingness to repair your credit, the more likely you are to receive a remortgage offer at a reasonable interest rate.

It can take between 6 months to a year for things to go back to normal as this is the period when the poor credit history events are officially removed.

Due to the constantly changing nature of the mortgage industry, lending criteria are also in constant flux.

Therefore, it’s not possible for us to simply post a list of static remortgage deals right here.

If you do have serious blemishes on your credit history, then you are likely going to need to approach a lender who specialises in remortgaging for people with a poor credit history.

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Typically a specialist mortgage broker or advisor will be able to assist you and offer you the right guidance.

Here at Mortgageable, we have access to a comprehensive list of lenders and will be able to signpost you to the best possible deals, no matter if you have an adverse credit history or not.

Get in touch with us today for a no-obligation chat about your specific situation.

It’s a good idea to familiarise yourself with the costs of remortgaging, especially remortgaging with bad credit since you are likely to be offered a higher interest rate.

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Tips to get the best bad credit remortgage rates

If you have bad credit and want to remortgage your property, here are some key things to bear in mind that may improve your chance of securing a remortgage with better terms:

Avoid the banks

It is important to remember that since the mortgage is highly competitive, bank advisors are trained to secure a commitment from prospects as quickly as possible.

As a result, they will commonly carry out a credit score on anyone willing.

This is perfectly ok if you have a clean credit score but is not great if you have poor credit and want a competitive deal.

Carrying out a credit score with a lender that is unlikely to lend to you in the first place is a waste of time and even worse – potentially damaging to your already poor credit report.

Your best option is to work with a whole market broker who has experience working with individuals with poor credit and presenting them with the best possible deals.

Get your credit report

The next step is to understand what you’re working with and to remortgage with bad credit, it’s important to be aware of the adverse events that will affect you and how to overcome them.

Popular places to carry out a credit check include agencies such as Experian, Check My File and UK Credit Ratings.

Each agency will collate slightly different information, and this will enable you to learn why you may have been declined by a lender in the past.

It is completely free, and the best part is it won’t result in you being penalised and it will not impact your score when searching via these agencies.

Calculate your LTV

To calculate your loan-to-value (LTV) use your properties value and the deposit and/or equity you have in the property.

Your LTV is important since most lenders will use it to determine if to approve your application and the exact deal they offer.

For example, those with higher LTVs are typically required to have a better credit rating than individuals with lower LTVs, as the higher the deposit and equity the less risk for the lender.

Improve your credit score

If you are looking for an impactful way to increase your credit score, one of the most common methods is to use an adverse specific credit card.

By using and repaying back this credit card bill on a monthly basis, you are proving that you are able to borrow and live within your means. This activity will gradually improve your credit score.

CashPlus is a common credit card used for those with bad credit looking to make improvements.

Should I improve my credit score if I have a poor credit history?

If you have a poor credit history and are looking to remortgage your property, then it’s likely you will hit some stumbling blocks when submitting applications to lenders.

This is even more likely if you apply to a high-street bank and a lender who doesn’t specialise in bad credit remortgages.

Yet many people do find that taking the necessary steps to improve their credit rating does help.

This includes requesting removal of incorrect entries on your credit record, paying off outstanding debts and ensuring you keep up payments on current bills.

Maybe even taking out a credit card and showing consistent repayments can all contribute to demonstrating you are a responsible borrower.

These steps may not impress your traditional lender, especially if you do not meet their very specific requirements.

Specialist lenders are ideal as they are familiar with bad credit remortgages and so you may be able to secure a far better interest rate with them if you are willing to put everything into repairing your credit score and proving you are financially responsible.

These specialist bad credit lenders understand that people’s financial circumstances can change and typically take your present and recent financial history into greater consideration.

Can I afford to remortgage?

No matter your current financial situation, all mortgage and/or remortgage applications are subject to an affordability assessment.

The lender will assess your income vs expenditure to determine your debt-to-income ratio.

As of 2014, the official advice from the Financial Conduct Authority is that your debt-to-income ratio should not exceed 45% of the total mortgage or remortgage offered.

For a general estimation of whether you can afford a remortgage, you can use the following steps:

Determine your annual income and divide by 12.
Determine your monthly outgoings e.g. bills and any other financial commitments you have.
Divide your monthly expenses by your monthly income and multiply it by 100, which will provide you with your debt-to-income ratio.

The general rule is that the lower the number is the better. You can lower the ratio by either reducing your outgoings or increasing your income.

What should I do if I want to remortgage with bad credit?

If you’re looking to remortgage but have a bad credit rating, it’s always a good idea to talk to an expert.

Our brokers will be able to assess your situation before finding a lender to suit your circumstances.

Not only does this help to protect your credit rating, but it also saves you a lot of time.

Remortgage with Bad/Poor Credit UK Conclusion

Key points:

Remortgaging with a bad credit history is still possible.
An experienced broker with knowledge of bad credit can help.
Get familiar with your credit report to understand what may be holding you back.
Find a mortgage lender that is a specialist in adverse credit.

If you’d like to talk to someone about remortgaging with bad credit, we can advise you.

We’ll search over 90 lenders to find the best remortgage deals for people with bad credit.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

Portfolio Landlord Mortgages – UK Comparison

by Kristian DerrickPosted on 19th July 2018 | Updated 31st October 2024

In October 2017, the Prudential Regulation Authority (PRA) made some changes to the way lenders view borrowers who have four or more buy to let properties.

Part of the Bank of England, the PRA regulate around 1,500 banks, building societies, insurers, credit unions and investment firms.

Changes have been made to ensure that lenders only offer buy to let mortgages to landlords who can comfortably afford them. This means that in the future, you may need to provide your lender with additional information about your current income, outgoings, assets and liabilities when applying for a buy to let mortgage.

So, whether you’re a first-time landlord looking to grow your portfolio, or you’re a seasoned buy to let investor, now’s the time to familiarise yourself with the new rules and regulations.

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What is a Portfolio Mortgage?

A portfolio mortgage is a type of mortgage offered to landlords with a portfolio of properties.

Portfolio mortgages are positioned in-between buy-to-let mortgages and commercial mortgages. They’re typically interest-only like normal buy-to-let mortgages because they’re still for buy-to-let properties.

What is a Portfolio Landlord?

If you own four or more mortgaged buy to let properties, lenders will class you as a portfolio landlord.

If you own less than four properties classified as a private landlord and only require a normal buy-to-let mortgages or limited company buy-to-let mortgages.

Always remember that lenders only take into account the number of properties you own. This means that if you have four or more rental properties, or if a new purchase will be your fourth one, mortgage lenders will still class you as a portfolio landlord.

What can a portfolio mortgage be used for?

Portfolio mortgages can be used to finance the following:

Normal buy-to-let properties
Limited company buy-to-lets – this would require a limited company portfolio mortgage
Auction properties
Student buy-to-lets
Multiple flats under one freehold
HMO (Houses in Multiple Occupation) – HMO mortgages are available as a standalone mortgage product if you don’t have a portfolio of 4 or properties
Properties owned via a limited company.
Consent to let properties.
Holiday lets.
All buy to let mortgages owned either solely or jointly.

How does a portfolio landlord mortgage work?

A landlord mortgage, portfolio mortgage or buy-to-let mortgage works identically to a regular mortgage, that means:

It is interest-only.
Secured on rental properties.
On a one mortgage per property basis – not one mortgage for the entire portfolio.

This means that you will require a portfolio mortgage after you have acquired four properties and for every new property you acquire after the fourth.

What if you already have a buy-to-let mortgage?

If you have an existing buy-to-let mortgage, you have the option of remortgaging them onto a variety of portfolio products, however, this isn’t required unless your introductory period was due to end and didn’t want to be transferred to your lenders Standard Variable Rate (SVR).

The reality is that you can have from four to many additional properties with portfolio mortgages.

Recommended guides:

What differences are there for portfolio landlords?

When applying for a mortgage, you may need to provide extra information to your lender than you did before. This might include your current property portfolio and experience, as well as your assets and liabilities. Lenders may also want to see a business plan and cash flow statements for the properties you own.

Lenders will want to assess your personal income and expenditure including tax liability, living costs and essential expenses, as well as any other financial or credit commitments that you may have. In some cases, the process is now quite similar to a residential mortgage application.

It’s important to remember that lenders will also evaluate your rental income, especially if it is used as part of your personal income. Rental income is usually validated by comparing typical rents in the area, as well as local demand. Future rental income will be checked, too.

What is an Interest Coverage Ratio (ICR)?

Lenders work out ICR as a ratio of your expected monthly rental income from a buy to let property to the monthly interest payments, taking into account any likely future increases in interest rates.

This ratio is used to assess the debt you intend to take on. Lenders want to work out how easily you’ll be able to pay it back using the rental income from your new property alone. If it won’t bring in enough income, your lender won’t grant you a buy to let portfolio mortgage on rental income alone.

However, it is also possible to apply to use your personal income, as well as your potential rental income when taking out a new buy to let mortgage. This will be considered in circumstances where there is a shortfall in the required rental income received from your buy to let property to meet the minimum ICR rate.

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Portfolio mortgages frequently asked questions

What’s the difference between a professional landlord and a portfolio landlord?

Typically, an individual that has a full time job or earns the majority of their income outside of their rental properties are referred to as “amateur landlords”.

Landlords that have four or more properties and generate the majority of their income via their buy-to-let properties are referred to as “professional landlords” and often have a portfolio mortgage product.

What is the best mortgage for a landlord?

If you are landlord with up to 3 properties then you’ll need regular buy-to-let mortgages, often these are acquired via a limited company since there are certain tax advantages.
If you own more than 4 buy-to-let properties then you will need a portfolio mortgage when you purchase any further properties and/or when you remortgage your existing ones.
At the point your borrowing exceeds the limits determined by your lender, then you will have to consider a commercial mortgage.

How many landlord mortgages can you have at the same time?

In theory, it’s possible to have between four to almost any number of portfolio mortgages beyond that. Of course, lenders will set their own requirements with regards to lending limits and how many mortgages you can hold with them. If you do exceed these borrowing limits and you want to acquire further but-to-let mortgages, it’s usually advised that you look into commercial mortgages.

If you are considering a commercial mortgage, then you may want to think about remortgaging all of your current buy-to-let/portfolio mortgages onto a single commercial mortgage.

Related reading?

Got a few questions about buy to let portfolio mortgages?

The new rules around buy to let mortgages can be difficult to get your head around at first, but you’ll feel much more confident once you’re in the know.

Planning on applying for a new buy to let mortgage in the near future? Talk to us if you’d like to know what you need to have in place.

If you have any questions about but to let portfolio mortgages, Call us today on 01925 906210. One of our advisors can talk through all of your options with you.