Problems trying to remortgage with bad credit history

It is now so common for many people to have some sort of bad credit history. The usual reasons can include loss of job, collapse of business, split with partner or change in circumstances like the  arrival of a baby!

If you took on a very high loan to value mortgage based on your houses value in summer 2007 its likely that your not going to remortgage unless you have cash to offer the lender to get your self out on negative equity, and into a position where the lender is exposed to around 75% of the homes current value.

Some bad credit history in the form of defaults and arrears should not matter too much as long as your existing mortgage has been paid on time for the last 3 months.

Many subprime (and prime) lenders are going back to more old fashioned lending principals since the credit crunch, and lending is more based on the individuals ability to pay, not the naive assumption that property always goes up so who cares if they can afford the payments or not. This is why the old black mark on your file may not be that important.

Don’t worry about being labelled adverse or sub prime or risky, as long as you can afford the payments on your new mortgage, you can keep your home and not worry.

If you have negative equity, credit cards with balances on them, bank loans and store cards you should face up to your situation as soon as possible.

Don’t take money from friends and family just because of one debt collectors letter, don’t cancel your family holiday to pay some government bail out loan company. Its live so don’t throw it away. If you owe more money that you are worth in assets, go bankrupt. You will be discharged in a year in most cases, and all your debts will be gone and you can start a fresh.