Adverse Credit Remortgage: Refinance at Better Terms
Getting a remortgage with adverse credit is a daunting task and it is increasingly becoming a
widespread problem in UK. An adverse credit remortgage is a type of mortgage, which is
particularly used by people who have adverse remarks in their credit history.
Adverse credit ratings are rising as people are finding it difficult to repay the loans they took in
order to remedy their financial exigencies. The credit ratings are remarks given by your previous
creditors based on your repayment history. If you are punctual and prompt in repaying the
installments they give you a positive remark and a negative rating incurs, if you miss their
installments and are erratic in the repayment schedule.
Lenders are wary of this negative or adverse credit rating. They find it risky to lend any amount
to such persons and reject their applications in most of the cases.
While, applying for an Adverse credit remortgage, the borrower has to face two kinds of
situations. In the first case, although he has an adverse credit rating against him, he can offer
something like a house or home equity as a collateral to the remortgage. In second case the
borrower with the adverse credit history doesn't have anything to offer as collateral or the value
of collateral is not adequate to guarantee the loan.
The lenders, if they find that they can get something as collateral for the remortgage offer, are
prompt in lending as compared to a situation where they have to lend solely on the basis of
creditworthiness of the borrower. The lenders are comfortable by the fact that if the borrower
defaults in payments, they can repossess the collateral. Depending on the collateral and
creditworthiness, lenders fix interest rates, lending amount and the repayment schedules.
Remortgaging involves changing the mortgage without changing the existing house or property.
Adverse credit remortgage can be used for getting a better deal on mortgage from a different
lender. It can also be used to get an improved de