Bad Credit Remortgages
It seems that between 2000 and the middle of 2007, you could get mortgages or remortgages just because you asked for one. Things have changed. Interest rates are still very low, so even a bad interest rate remortgage is not that bad. The bad credit remortgage section is the one that’s been the most affected, a lot of people no longer qualify.
You can remortgage, bad credit or good credit. However, your bad credit remortgage will have a higher interest rate and your monthly payments will be higher than if you had good credit. That, of course, doesn’t mean that it doesn’t make sense to remortgage under any circumstance. Just that it’s better to have good credit.
Even with bad credit, it often makes sense to remortgage if your bad credit remortgage has a lower interest rate than the original mortgage loan (it should be 1% lower to offset new closing costs). And, of course, if you are doing a consolidation remortgage. To qualify for a remortgage, bad credit remortgage or good credit remortgage, you need to meet certain criteria. All are important.
Income
The income criteria for a remortgage are the same as for any mortgage loan. Your remortgage monthly payments cannot be higher than 28% of your gross monthly income. Overstating your income or hiding debt can get you the remortgage loan you want. But it’s fraud. In the long term, it will hurt you even if no one finds out you’ve committed fraud: you will get a remortgage you cannot afford long range.
Employment
Mortgage lenders all seem to want the same things when it comes to employment whether it’s the first mortgage loan they give you or a remortgage loan or a refinance. Specifically, they want:
1. W-2 and signed federal tax return forms for the past 2 years (the last year and the one before it).
2. The 2 most current pay stubs.
3. The 3 most current bank statements for all accounts you are using to prove you can afford the new remortgage loan.
4. Proof of additional income if you’re using additional income to qualify (rental agreements, alimony, etc.).
Self-Employed Remortgage
If you’re self-employed, you’ll also need:
1. Signed corporate federal tax returns for the past 2 years (the last year and the one before it) or signed federal partnership tax returns for the same period.
2. Year to date, signed profit and loss financial statements for the current and previous years.
Before You Remortgage
Part of getting ready for your bad credit remortgage is to take a close look at your credit reports. You should do this at least one month ahead of time. The reason for this is mistakes. Credit score reports often have mistakes: they’re not reporting payments you made, reporting open loans that you paid off or, worse, reporting delinquent loans you never had.
The above are requirements for any mortgage and remortgage not just a bad credit remortgage. And though everyone should be ready from the beginning, bad credit remortgage borrowers are more affected if they’re not. If you have bad credit, variations in what’s required to remortgage (any new rule, a slight increase in interest rates) can make it impossible for you to remortgage. The readier you are, the faster you’re done.
You can remortgage, bad credit or good credit. However, your bad credit remortgage will have a higher interest rate and your monthly payments will be higher than if you had good credit. That, of course, doesn’t mean that it doesn’t make sense to remortgage under any circumstance. Just that it’s better to have good credit.
Even with bad credit, it often makes sense to remortgage if your bad credit remortgage has a lower interest rate than the original mortgage loan (it should be 1% lower to offset new closing costs). And, of course, if you are doing a consolidation remortgage. To qualify for a remortgage, bad credit remortgage or good credit remortgage, you need to meet certain criteria. All are important.
Income
The income criteria for a remortgage are the same as for any mortgage loan. Your remortgage monthly payments cannot be higher than 28% of your gross monthly income. Overstating your income or hiding debt can get you the remortgage loan you want. But it’s fraud. In the long term, it will hurt you even if no one finds out you’ve committed fraud: you will get a remortgage you cannot afford long range.
Employment
Mortgage lenders all seem to want the same things when it comes to employment whether it’s the first mortgage loan they give you or a remortgage loan or a refinance. Specifically, they want:
1. W-2 and signed federal tax return forms for the past 2 years (the last year and the one before it).
2. The 2 most current pay stubs.
3. The 3 most current bank statements for all accounts you are using to prove you can afford the new remortgage loan.
4. Proof of additional income if you’re using additional income to qualify (rental agreements, alimony, etc.).
Self-Employed Remortgage
If you’re self-employed, you’ll also need:
1. Signed corporate federal tax returns for the past 2 years (the last year and the one before it) or signed federal partnership tax returns for the same period.
2. Year to date, signed profit and loss financial statements for the current and previous years.
Before You Remortgage
Part of getting ready for your bad credit remortgage is to take a close look at your credit reports. You should do this at least one month ahead of time. The reason for this is mistakes. Credit score reports often have mistakes: they’re not reporting payments you made, reporting open loans that you paid off or, worse, reporting delinquent loans you never had.
The above are requirements for any mortgage and remortgage not just a bad credit remortgage. And though everyone should be ready from the beginning, bad credit remortgage borrowers are more affected if they’re not. If you have bad credit, variations in what’s required to remortgage (any new rule, a slight increase in interest rates) can make it impossible for you to remortgage. The readier you are, the faster you’re done.