Remortgage (BAD CREDIT FILE)

[Helplorditsahardlife]

is it possible to get a lender for a mortgage with bad credit (168 score on Experian). There are records of live payday loans and home lending on credit file & defaults but no CCJ. Self-employed with a gross income of £5700 pcm & rental income of £1500 from the property to be remortgage which is worth £350,000. Can I secure a lender?

I don't think people with defaults can get a mortage very easily, no, and they certainly don't like payday loans.

The good news is it only takes 2 years to clean up your score from poor to good (providing you don't miss any payments) so depending on your age/circumstances, i'd be inclined to do this.

Have you actually been refused a mortgage? Might be worth applying just to see what comes back,, then you can work on whatever it is they don't like.

That is a huge amount of monthly income why on earth are you in debt?

The problem is a default stays on your credit record for 6 years and banks don't like to see defaults.

I managed to get a mortgage after my DH died and I wanted to keep the house - there was only a few years left on his mortgage so I was only asking for a small amount though. I have not so great credit although no payday loans and I had no live CCJs - I had an administration order about 12 years ago which wrote off most of my debt. The bank were very thorough in their process and although I initially failed the credit check, because I passed the affordability check and my circumstances, they let me appeal the decision which I won. It can be done, but they are very cautious.

I'd probably let the mortgage tick along on the standard variable rate for a couple of years while working on managing finances properly so payday and short term loans are not required as any mortgage with that credit record is likely to be very expensive.

Why the chaotic finances?

Clients not paying, lack of time or simply not making the effort? Identify the reason and therefore the appropriate solution whether it is getting your invoices paid on time, employing an assistant or just making the effort yourself.

Also might be worth having a few very frugal months to allow a float to build up to ease out any cashflow issues. And don't forget to put away the appropriate amount for tax.

is it a btl re-mortgage? is it not possible to stay with the existing lender

It is possible, there are lenders that don't use credit score. They still check your credit file though. Self employed you usually need 2 or 3yrs tax calculations and tax year overviews. Accounts can be used instead. Some lenders will accept 1yr trading. You're most likely going to need to go to a specialist lender though so the rate will likely be dreadful and the loan to value will probably be reduced. They usually want to know the reason for the issues to gauge as to whether they're likely to continue. Pay day loans they will want you to be clear of these for quite a while. For defaults the date registered is usually what they work off, the date the PDL's were opened will also be key.

@Sbryson thank you, do you know any leader that does not use credit as a criterion to lend? Thanks

There's a number of them, Aldermore, Darlington BS, Furness BS, Bluestone, Kensington, Kent Reliance, The Mortgage Lender (that's actually their name). Kensington will do 1yr trading for self employed and typically ignore adverse credit registered over 2yrs ago and go up to 90% LTV. The Mortgage Lender is very flexible too but the rates can be grim. Bluestone will do just about anything but their service can be dreadful and their rates are awful. I believe the minimum deposit is 15% with them.

@Somebodyimportant1 as per above, I forgot to tag you

Active payday loans are red flag, along with a low credit score and defaults, I think you really struggle to find a mortgage.

Best suggestion would be speaking to a broker who will be able to find a specialist lender but you will find the rates will be awful and will more than likely have astronomical arrangement fees.