Bad credit re mortgage uk
Bad credit is when your Credit references say your bad with money and/or have had no experience with paying back money. A good friend of mine was in 25 and has never had a loan/overdraft etc. in her life thus she has no credit score. Once we tried to rent a car in her name and could not due to the bank saying “we do not have enough information on this person credit status” What a reference… bit of a joke in my opinion really that someone with no money can borrow load of £££ vs. someone who has never borrowed can not. This is the problem with these scoring systems in my opinion….
Bad credit makes it harder to get a mortgage and also changes the dynamic of how the mortgage is set. For example most mortgages now allow upto 90% of the actual cost of the property. This can be moved to say 60% for people with bad credit along with a far higher interest rate e.g. 9%.
Re Mortgage
There are 3 types of re mortgages available in the uk (that I can find so far)
Part and part – this is when part of your borrowings are being paid back on an interest only basis whilst the rest is paid back on a repayment structure. Most people whom I
found whom take this re mortgage option were paying interest only and now wish to start pay have come across paying back some of the loan.
You been paining into your mortgage for 10years but let’s say your car broke down so you need a new car… Well one way to get the money is by re mortgaging which releases some of the equity in your home thus basically extending the life or amount of your repayments for the cash injection. Some older people use some of the equity in their homes to fulfill life long dreams e.g. the good old cruise. The main second reason for releasing this equity is to improve the property. This option often has a better rate due to the fact that your increase the property value. A good example would be adding a new bathroom.
The third main reason for re mortgaging is to change your repayments structure. Most mortgages aren’t fixable enough to cover the changes in repayment structure. Two good examples are if you could afford to pay a lot more due to a wages increase, or the opposite, a wage decrease…
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