Debt Consolidation Mortgage

Debt Consolidation Mortgage

Getting a new mortgage to consolidate your debts can be a good way to get your finances back on track. In this guide we’ll cover:

How we helped a customer to save money every month with a debt consolidation mortgage – even with poor credit history!

A little about the remortgage process with us – it’s easier than you might think

How we could help you – including why it’s best to go through a mortgage broker

How we helped with a debt consolidation mortgage

With Clever Mortgages,  Mr C was able to:

Reduce his mortgage term Cut the interest rate  Save overall £124.42 per month.

Current Mortgage£75,263£635.922.29%2 Year Fixed Rate10 Years 9 Months
Current Secured Loan£48,169£637.598.68%Variable10 years 9 months
New Mortgage£123,435£1149.092.24%5 Year Fixed10 Years

Mr C had been with his lender for a fixed rate period, and knew he might be able to save money every month if he consolidated a secured loan he had,  with a new mortgage.

His current rate was at 2.29%, which is similar to the new mortgage, but the key was to incorporate in the secured loan which was on a much more costly rate. We were also able to reduce the term by 9 months and saved £124.42 per month.

What are the benefits of remortgaging?

A remortgage is when you take out another mortgage on your home to  replace your current mortgage– and we can help you with this, taking all the hassle away from the remortgaging process.

It’s sometimes possible to secure a lower rate, giving you the opportunity to consolidate your debts, whilst saving yourself money every month. Debt consolidation can be a good solution for some mortgage customers – however, it’s not suitable for everyone.

You should always review the total amount payable through consolidation,  not just the immediate savings in terms of a reduced monthly payment. Please be aware that any unsecured debts consolidated within the mortgage, would then be secured against your property.

We’ve helped 1000s of customers to remortgage – and bring their monthly payments down.

Want to remortgage with bad credit?

Worried about bad credit? We work with customers every day who have bad credit but want to remortgage – and we always do what we can to help.

Remortgaging could be easier than you might think – especially when you choose a broker who knows how to get you with the right lender to save you money.

Enquire with us about a remortgage with us, and we could:

A debt consolidation mortgage can help you save money every month – we recently helped Mr C who was nearing the end of his fixed rate deal, to consolidate his secured loan and mortgage into one monthly repayment reduce the mortgage term and save money.

Help get you back on track – being able to consolidate Mr C’s secured loan with a mortgage product meant only having to plan for one monthly payment instead of two, making the overall debt much easier to stay on top of.

Reduce the term of your mortgage – we can often help customers cut years off their mortgage – helping them to become mortgage free far sooner than they thought.

Why should I use a mortgage broker?

You’re likely to only have to do one application – this will save you time, and more applications from being recorded on your credit file

Some mortgages especially for people with bad credit are only available if you go through a mortgage broker

Brokers can advise on what would improve your chances – e.g. finding a guarantor or opting for a joint mortgage

They can take the hassle of application forms away – talking you through every step, and asking all the right questions

What next?

If you are looking for expert advice on remortgaging your property, contact our team today. We will be happy to help advise you on what you on your options.

We are experts in offering solutions to people with bad credit and can help you if you need a helping hand with your next move.

Get a call from a mortgage advisor at a time to suit you,

Can I Get A Mortgage With Bad Credit?

Can I Get A Mortgage With Bad Credit?

When you apply for a mortgage, the lender tries to predict your reliability for making your repayments responsibly, based on the way you’ve acted in the past. To do this, they look at lots of different data that’s stored on your credit file. This might include how many applications for credit you’ve made recently, how much you owe, what credit products you’ve had and whether you paid them off on time.

If you have a bad credit score, mortgage lenders are less likely to lend to you, and you might have already been declined by a lender. But all is not lost. We help people every day who are worried they won’t be able to get a mortgage due to their bad credit situation – so don’t give up hope, we might be able to find a good mortgage deal that’s just right for you.

The advantages of using a broker

Using a broker like Clever Mortgages to help you get a bad credit mortgage could increase your chances, and this is partly because many of the mortgages available to people with bad credit are only available to brokers, and not directly to the public.

So, no matter how hard you try to apply to some lenders, they simply won’t lend to you unless you’re with a broker. We help customers with bad credit get the mortgage that’s right for them – and that’s because we know the lenders that are most likely to say ‘yes’, and to give the best rates.

Bad Credit Mortgage Experts 5 Star Trust Pilot

When you enquire with us, we’ll ask about your income (you’ll need to have various documents, such as payslips and bank statements showing your salary going into your bank), all your outgoing details, and we’ll find out from you the total amount you want to borrow, as well as any deposit you have to put down. The bigger the deposit, usually means the better likelihood of getting a good deal.

Consider a joint application

If your partner has a more favourable credit score than you, it could be worth considering a joint mortgage, as then their credit history will be taken into account too.

Together you might have a bigger deposit and can both bring your salaries into the equation – making you a much more appealing prospect to lenders.
Some quick facts about taking out a joint mortgage:

• Most joint mortgages are taken out with two people on them, but some lenders will allow up to four.
• Everyone named on the mortgage is responsible for making sure repayments are made.
• Most joint mortgages are taken out by couples, but you can also take out a joint mortgage with a friend, or a family member, or even a business partner you want to share a new investment with.

Make sure you can afford your repayments

Bad credit mortgages will typically involve higher interest rates, which will mean repaying more money each month. So you’ll need to work out exactly what you’d be expected to pay and decide whether you can afford this as well as all your other outgoings.

We can help advise you on what your mortgage repayments might be.
Here’s what you’ll need to consider:

• Make sure you know exactly what your mortgage repayments will be. You can use our online mortgage calculator to give you an idea of what to expect.
• Write down and add up all of your monthly outgoings – petrol, food shopping, leisure, bills – and don’t forget to leave some extra each month, for the unexpected, e.g. your car needing some work, or something in the house going wrong.
• Consider what you’d do if your situation changed, make sure you think about a mortgage insurance plan that’s right for you.

Consider getting a guarantor

If you’re unable to get a mortgage because of bad credit, a family member or close friend, might be in a position, and willing, to be named as a guarantor. Getting a guarantor is a big step, as you and your guarantor will be tied to each other financially for the term of the mortgage. This can impact on both of your credit ratings.

The guarantor would often have to state they’ll secure the mortgage against their house (or another large asset), which means that if you defaulted on your mortgage payments the guarantor may be liable.

Getting a guarantor doesn’t remove the need to be credit checked, but it can mean that if you do have bad credit, you’ve got a better chance at getting a mortgage.

How to improve your credit score

A good credit score can help increase your chances of successfully applying for a mortgage – and get you a better rate too. Ways to improve your credit score include:

  • Keep credit card balances low.
  • Check for any mistakes on your credit file. Your credit score may be negatively affected if information about your financial history is incorrect on your file.
  • Stay within agreed overdraft limits. Speak to your bank if you’d like an overdraft on a current account, but make sure you stick within the agreed limits.
  • Make sure you’re on the electoral roll for your current address.
  • Don’t make too many applications for loans or cards – too many applications, especially in a short space of time, can have a negative effect on your future score.

Can I get a Mortgage after an IVA?

Can I get a mortgage after an IVA?

You can get a mortgage after an IVA (Individual Voluntary Arrangement) but your choices may be more limited depending on the amount of time you have been out of the voluntary arrangement. Clever Mortgages are specialist mortgage brokers with a wealth of experience in helping to source an adverse credit mortgage after an IVA has completed.

8 mortgage lenders after an IVA

If you would prefer to speak to an Expert IVA Mortgage Adviser now, then please call us on 0800 197 0620 for mortgage advice.

How to get a mortgage after an IVA?

6 years after an IVA is registered the mark on your credit file should have come off and you should have received your completion certificate from your insolvency practitioner. This is worth checking on your credit file and also on the Insolvency Register.

Even with your credit file no longer showing an IVA it will have affected your credit rating and it can be difficult to get mainstream lenders to view your remortgage or mortgage application favorable. Luckily, there are often lenders who may provide a mortgage after an IVA. These specialist lenders are often referred to as “adverse mortgage lenders”.

Adverse mortgage lenders are found and assisted by master brokers like Clever Mortgages, who help gather information and give the required advice so you can make an informed decision.

The process of finding and applying for a mortgage after an IVA is the same as most other applications, requiring documentation and an affordability assessment. All of which Clever Mortgages can assist you with.

How long after an IVA can I get a mortgage?

You are likely to have mortgage options straight after finishing your IVA. Your credit rating may cause your options to be somewhat limited and have a few restrictions, but it is worth investigating.

The number of specialist mortgage lenders willing to consider mortgages after an IVA will likely increase the longer you have been out of an arrangement.

There are also other lending products that could be possibilities such as Secured Loans or Product switches.

In some cases, there may be lenders who would consider a remortgage with you during the IVA, but with certain requirements, such as using funds to settle the IVA.

Some lenders may decline any application for a mortgage if you have ever had an IVA, but specialist lenders could consider applications regardless of your IVA history. Generally the longer the IVA has been completed, the more lenders may become options. High street lenders may have a harder time placing your situation within their criteria, which is where a specialist master broker like Clever Mortgages comes in.

Regardless of how long ago your IVA has completed, or even if you are looking for options and you are still in your IVA we can provide advice on getting a mortgage after an IVA.

What rates can I get on a mortgage after an IVA?

Clever Mortgages have a team of mortgage advisors who have helped many other people coming out of an IVA to make successful mortgage applications and remortgages.

The range of mortgage interest rates as of 26th March 2019 are between 1.52% to 3.63%**

Clever Mortgages were able to find a mortgage for one of our customers recently which saw him save money on mortgage fees, get a competitive 1.90% rate and get this rate fixed for 5 years *APRC representative of 3.6%

Can I remortgage during an IVA?

Remortgaging whilst you are in an active IVA is possible, but there are only a few specialist lenders who would consider your case. The reason for your remortgage would also determine whether or not you were able to pursue this option.

When remortgaging within an IVA there could be requirements from the lender, such as having to use released funds to settle the IVA early.

You could remortgage during the IVA to find a better rate or to fix the interest amounts but if your intention is to release equity, you would likely be expected to pay some of this into the voluntary arrangement.

These cases are certainly worth talking with Clever Mortgages about, as they are experts in remortgaging within IVA arrangements and after their completion.

What rates can I get on a remortgage after an IVA?

Remortgaging after an IVA could be one of the first actions you take following the completion of your debt solution arrangement. The remortgage could be used to lower your payments, interest rate or to release funds for home improvements.

Overall the rates you can get will be determined by whichever lenders are available to you.

Clever Mortgages were able to consolidate the clients’ secured loan and his current mortgage into a new mortgage package. This took the clients monthly payments from £1,162 per month down to £650 saving £512 per month. *APRC representative of 3.6%

What size of deposit will I need?

The deposit size will vary by the lenders available to you, but you may be less impacted by your completed IVA history or debt solution than you think.

Some lenders may expect larger than average deposits due to your credit rating, whereas some may only expect the standard deposit size from 5% to 10% of the property value.

How to save for your deposit

Saving for the deposit can be an ordeal but you could reassign your monthly IVA payment amount into a separate account, creating a mortgage deposit savings pot.

Just because you have completed an IVA does not necessarily stop you from taking advantage of other deals such as; First Time Buyer initiatives like a 5% deposit scheme or Right to Buy schemes.

Another option is the Help-To-Buy scheme which could be an option depending on your circumstances and eligibility.

What is my credit file like after an IVA?

Your credit report will show your IVA for 6 years from the date of issue (From the start of the IVA). An IVA is an individual voluntary arrangement, meaning the term is adjusted based on your specific circumstances but usually last between 5 to 6 years, after which time you will receive a completion certificate from your insolvency practitioner.

This means that at the end or a year thereafter, the IVA will no longer be recorded as an active debt solution arrangement on your credit report. This does not mean that your credit reference will not show any debts or adverse credit like defaults or missing payments that were not included in your IVA.

Clever Mortgages are a specialist broker and can help you find a mortgage after an IVA and provide you with more information on the after effects of an IVA on a mortgage or remortgage application, including your chances of being accepted.

You can check your credit report from sites such as Experian, Noddle or Check My File which are able to give you an idea of what mortgage lenders base some of their decisions upon.

How will Clever Mortgages Help?

Clever Mortgages would use the Noddle report of your circumstances as it includes information on both Experian and Equifax. Credit reports directly from either Experian or Equifax could miss information shown on its counterpart.

Once you have a copy of your current credit profile, please complete the enquiry form below and the Clever Mortgages team can provide you with specialist advice and help find the options available to you.

A lender may consult one or more of the credit referencing agencies to help them make a decision on whether to lend to you. This can result in them potentially seeing more information on your credit profile than you would have access to (using just one credit referencing source).

A credit reference is done by a lender or mortgage broker as a part of any mortgage or remortgage application. This search is standard and highlights any current or past outstanding debts such as unsecured debt, hire purchase and secured debts.

* APRC Representative Example Mortgage amount £170,995 (including £995 mortgage lender fee), 64 payments of £748.30 at a fixed interest rate of 2.28%, followed by 236 mortgage repayments of £889.60 at a variable rate of 4.24%. Over a term of 25 years, giving a total amount payable of £258,861 at an APRC representative of 3.6%. The contract will be secured against your property.

**Based on rates available from 3 major lenders, lending on 85% LTV for a residential purchase, gift as deposit, 25-year term, and if IVA is no longer on credit file.

We can help you remortgage even with bad credit

We can help you remortgage even if you have bad credit

If you have bad credit and need to remortgage your home, then don’t worry as we should be able to help. We understand there can be lots of reasons for people having an impaired credit profile and will look into your circumstances to make sure you’re offered the most suitable solution.

Continue reading “We can help you remortgage even with bad credit”

Myths around mortgages and credit scores

Your credit score is one of the most important pieces of information about you when it comes to borrowing money. Mortgage lenders use your credit record to help them make a decision on whether they should lend to you. However, despite their importance, there’s still a lot of misunderstanding and confusion around credit scores and what they mean.

Myths around mortgages and credit scores

Your credit score is one of the most important pieces of information about you when it comes to borrowing money. Mortgage lenders use your credit record to help them make a decision on whether they should lend to you.

However, despite their importance, there’s still a lot of misunderstanding and confusion around credit scores and what they mean.

The myths uncovered

Here we list some of the myths surrounding credit scores and what they can mean for your mortgage application.

“My credit score is too low to get a mortgage”

There’s no set minimum score required to get a mortgage. This is determined by the lender themselves. As lenders have different levels of tolerance, some will be more willing to consider you than others if you have bad credit. Although many won’t want to risk lending to someone with bad credit, there are lenders who can help.

If your credit score is low then applying with a company who specialise in offering bad credit mortgages will give you the best chance of getting approved. These mortgages work in exactly the same way as a standard mortgage, but interest rates will be higher and it’s likely that you will need to put down a bigger deposit.

“Negative information on my credit report will stop me getting a mortgage”

There are still mortgage options available to people who have negative information on their credit file. This might be a CCJ, defaults from previous loans or even a bankruptcy discharge. You may have otherwise been in an IVA or other debt plan to help repay your debts. If you’ve struggled financially in the past but are back on track now then there are lenders who will consider your application. This negative information remains on your credit file for a maximum of 6 years, so if you’re unsure that it still exists you should check your credit report. You can do this through a credit reference agency such as Experian or Equifax.

“I’ve never borrowed which means I’m a safer customer to lend to”

Lenders actually prefer to lend to people who have some history of making loan repayments. It provides proof that you have previously made payments on time and in full. As you’re likely to continue with this behaviour, it can make you be perceived as more trustworthy than someone who hasn’t borrowed before. This is because those who haven’t borrowed can’t provide any evidence to show they will make payments on time.

Having no credit can often make it just as difficult to get a mortgage as having bad credit. You should work to try and improve your credit score if you’re in this situation. This can often be the case if you’re a first-time buyer and have never had a mortgage or loan before. If you’re getting your first mortgage, here are some ways you can improve your chances.

“My partner has bad credit so neither of us will be able to get a mortgage”

If your partner has struggled with debt then it’s natural to worry about how this might affect you as well. The good news is that there are lenders out there who are willing to consider your application whether you’re buying a house individually or looking for a joint mortgage. If you have no financial links with your partner already, such as a loan or a joint bank account, then your partner’s credit score won’t affect you getting a mortgage independently of them. Even if you’re married you won’t be associated financially unless you have some sort of joint finances. Alternatively, you might be asking will my bad credit score affect my partner?

If you’re looking for a joint mortgage, however, you will become financial associates and will both be liable to repay. A joint mortgage will allow you to borrow more money, as it will take into consideration both your incomes.  Despite whether or not you have a good credit score, your partner’s bad credit will affect your interest rate on the mortgage and will likely require you to put down a larger deposit. As each person’s situation is unique, it’s best to speak with a mortgage advisor before applying.

Take a look at our article on joint mortgages for further information.

“Being on the electoral roll isn’t important”

If you have bad credit you should be doing everything you can to help improve your score. One of the ways you can do this is by making sure you’re on the electoral register. If you’re not then you should register as soon as possible. Although it’s not compulsory to vote, having your details available on the electoral roll allows lenders to easily verify your identity and address. This can have a positive impact on your credit score. If you’re not sure if you’re already registered, you can check on the website Your Vote Matters.

“Applying to different companies will increase my chances at being accepted”

Many people assume that if they keep applying for finance they will eventually find a company who will accept them. This couldn’t be more incorrect. When searching for finance, multiple applications can be one of the worst mistakes you can make. Each time you make a credit application it leaves a mark on your credit file. This is because the lender will typically carry out a “hard” search, which will leave a footprint on your credit file that other lenders can see. These have a direct impact on your scoring as they show your level of need for credit. If you have too many applications made within the same time period, lenders can be put off by your application as it can seem as though you’re desperate for credit and therefore potentially less likely to make payments on time.

The best way to approach finance applications is to do your research before applying and if you know you’re going to apply to more than one, then try and spread these out over a few months. If you want to make comparisons, you can always ask the lender to run a soft search for a quote, which will only be visible to you.

“I’ve not checked my credit score but I presume it’s ok”

Your credit score is not something that will be made itself known to you. So if you don’t check your credit score, you won’t know if it’s good or not. Many people have never checked their credit reports. Some people do this because they’re afraid of the result; others don’t check it because they don’t understand the importance of it. Some people also avoid checking their credit report because they think that this will have an impact on their score. In actual fact you should make sure you check your score regularly so you can know the situation you are in, how you can improve it and what help you to identify what types of finance you will be eligible for. This can help you avoid being rejected.

You can check your credit score through a credit reference agency such as Experian or Equifax.

“My bad credit will always hold me back”

Just because your credit is bad now doesn’t mean it will stay this way forever. There are a number of things you can do to improve your credit score and get your finances back on track. This might mean paying higher interest rates, for now, to make up for it, but over time you can prove to lenders that you’re a trustworthy person to lend to again.

Ways to improve your credit score

A poor credit history can complicate things when trying to get a mortgage. Many mortgage providers won’t lend to someone who has suffered from bad credit regardless of their situation now. If you’ve been unsuccessful in getting a mortgage then you should work to improve your credit score.

Ways to improve your credit score

A poor credit history can complicate things when trying to get a mortgage. Many mortgage providers won’t lend to someone who has suffered from bad credit regardless of their situation now. If you’re confused about credit or you’ve been unsuccessful in getting a mortgage then you should work to improve your credit score.

Unfortunately, there’s no quick fix for your bad credit score. Your credit history has been built up over time and the things that have had the biggest impact will be different for everyone. You will need to demonstrate over time that you can continually make payments in full and on time. Any negative information that might be on your credit file such as CCJs, an IVA, late payments or bankruptcy will exist on your credit file for 6 years since the date they were recorded. You might need to wait until these have disappeared from your file if they are preventing you from getting approved.

Luckily, there are some things you can start doing right away to help improve your credit score:

1.     Check your credit report

The first step to improving your credit is to know exactly what your situation is. You should get into the habit of regularly checking your credit score. This is so you can make sure the information about you is accurate and up to date. You will also be able to see how your credit score improves over time as you start making more positive financial decisions. Checking your credit score is free through a credit reference agency including Experian, Equifax or Clear Score.

2.     Plan to pay off your existing debt

Try and pay off all your existing debt as soon as possible. If you can’t do this yet you should create a plan so you know when you’ll have this paid off. If you use any savings to help pay off debts then make sure you still have some money aside for emergencies. This will help you to avoid getting into any debt again. Paying off your current debt will help to show lenders that you’re working to rectify your current financial situation.

3.     Be cautious when using credit cards

Cancelling any credit cards that you no longer use can help to show that you’re intending to borrow less. It can also stop the temptation to use them at any point. On the other hand, if you don’t have a credit card, taking one out and managing it properly can help to improve your credit score. You should only do this if you know you can afford to make repayments on time and in full.

4.     Have some responsible credit

If a credit card is not appropriate for you, or if you can’t get approval for one, then taking out a small form of credit might be a better idea. This could be a mobile phone contract or store card. Providing you manage these well it can show lenders that you can pay bills responsibly, helping you to show that you can be trusted with a bigger loan.

5.     Get on the electoral roll

Another way you can help to improve your credit is by making sure you’re on the electoral roll. If you’re not then you should register as soon as possible. Although it’s not compulsory to vote, having your details on the electoral roll allows lenders to easily verify your identity and address. This can have a positive impact on your credit score.

6.     Consider bad credit finance

If you can afford to pay higher interest rates and potentially put down a bigger deposit, then bad credit finance options such as a bad credit mortgage might be for you. These are designed for anyone who has a low credit rating and unable to get competitive rates for finance. The benefit of paying higher mortgage rates, for now, is that providing you pay on time in and full, it can demonstrate that you are someone who can be trusted to lend to. If you can continue to prove this you will increase your chances at being eligible for more competitive interest rates in the future.