A bad credit history can be problematic when you’re looking to switch mortgages. If you’re eager to switch to a better deal and your credit rating is letting you down, we may be able to help. The brokers at Clever Mortgages are experienced in helping people just like you remortgage with bad credit.

It’s best to start by looking at your current mortgage deal. Find out when it ends and whether there are any charges involved if you switch deals early. If you don’t do anything and let your existing deal finish, your lender will likely switch you over to their standard variable rate (SVR) – and that could be pricey.

You should begin looking for a new deal before your current one ends. By using experienced brokers at Clever Mortgages, you may find it easier to locate a better deal.

It means to swap your current mortgage for a different one. The usual reasons for doing this are:

• Your existing deal is ending, and you want to find a cheaper rate than the standard variable your lender wants to move you to
• You want to find a better interest rate (more likely if the interest rates have dropped since you took out your current deal)
• You want to increase your mortgage for say debt consolidation or home improvements (quotes are usually required)

In all cases, you’re not moving home, simply switching from one mortgage to another.

When you are ready to switch, you should search for a lender who can offer a decent deal. A broker can help you search a wider portion of the market, which is especially important if you’re looking to remortgage with bad credit. Clever Mortgages specialises in helping customers with bad credit, so you’re in a good place.

The first step is to get an Agreement in Principle, otherwise known as an AiP. This doesn’t need a full credit check – it merely gives you an idea of what you may be able to borrow if you’re accepted. If you go on to make a formal application, the lender will review your credit history, income, affordability and let you know whether you’re approved. They’ll also arrange for a property valuation to take place.

If you switch to another lender, you’ll need to hire a solicitor to do this for you. A conveyancer also offers this service. However, some lenders will handle this part for you as part of the deal. Check the details to find out more.

Once legal completion has taken place, your new mortgage will repay your current mortgage and an additional funds raised will be used for the required purpose.  If this is debt consolidation funds may be sent direct to the provider. If it’s for home improvements, it will go to you.

Your new lender will let you know the new payments to make and when, the first one might be higher as it could cover more than one month.

There are various costs involved in remortgaging. One of the key ones to be alert for is an early repayment charge. For example, if you have a five-year fixed-rate deal, you may be charged if you try to exit that deal before the five years are up.

This fee could mean it is cheaper to stay on your current deal until it ends, rather than remortgaging early. If you think about switching, you must be sure the savings you’d make in doing so will outweigh the cost of remortgaging.

If you don’t have an early repayment fee to worry about, there are still likely to be other costs to think about. These may include:

• Arrangement fees
• Valuation fees
• Conveyancing fees
• Broker fees

If you source a remortgage deal for bad credit via one of our brokers, we can clarify the various fees that might be involved. There can be a lot of number crunching happening when you source a new deal.

It’s important to know which fees apply to which remortgage deal. It’s common for a low interest rate to have a high arrangement fee. You’re unlikely to get the best of both worlds in this case. Finding the right balance to give you the best remortgaging deal even with a bad credit history is vital, and we could help you do that.