A remortgage is a fancier term used to describe a refinance. The remortgage is simply the replacement or renegotiation of your current debt terms. To qualify for a remortgage with bad credit, you must have an existing mortgage or debt on your property. By getting a remortgage, you could benefit from a better rate, unlike the first time buyer buy to let kind of mortgage.
For a buy to let, if you are a first time buyer things usually get a little more complicated, as you don’t have any “life experience” in the eyes of your lender. When it comes to the mortgage market, a lender typically looks for a good credit score and an excellent history. Because you are a first-timer, you look vulnerable and unreliable to the standard lender. You don’t need to worry, though, as there are always particular mortgage lenders who will accept almost everyone. You can even apply for a remortgage with bad credit.
Why a First Time Buyer Buy to Let Is Harder to Get
These two types of mortgages are a bit different from each other. A remortgage with bad credit requires an actual property with a pre-existing mortgage. The first time buyer buy to let kind of mortgage is a little tricky. It is so for a good reason. Because you don’t own a property and are looking to purchase one, you don’t have much experience with how the system works. Not being familiar with this procedure usually means you don’t have a credit history, making most mortgage lenders uneasy.
To mortgage lenders, you look like a considerable risk. That’s why your interest rate will be higher if you are into the first time buyer buy to let kind of mortgage. However, you should not get discouraged as it is still possible to get a mortgage if that’s the situation that you find yourself in.
The “How to” for a First Time Buyer Buy to Let Mortgage
There are a few simple steps that you can take to make sure you are a great candidate in the eyes of the mortgage lender, especially if you are a first time buyer. First, you must prepare your documents and get them in order. Try to include as much evidence supporting your case as you possibly can. Important documents represent the proof of income, a forward rental forecast, proof of address, and most importantly, evidence that you have your deposit available. To ease this process, seek a mortgage advisor.
Secondly, and this is another crucial step, you should always check your credit score before appearing in front of a mortgage lender. Your credit history represents one of the most critical parts of this process. Most of the time, people cannot secure a mortgage because they fail this necessary step. Checking it before and trying to get it in great shape can make or break the deal with the lenders.
The Criteria You Need to Meet
If you are a first time buyer looking to get a buy to let, you need to understand the criteria you need to meet to appeal to your chosen lender. Most lenders will request an approved plan of the achievable rent. It would be preferred if you could show them a rental yield of at least 125% of the monthly payment you would pay for your mortgage. You also need to show proof of an income unrelated to the future rent expected for that property. Ideally, you would impress the lender with at least 25 thousand pounds per year.
Aside from the financial proof, you will need to prove that you already have a place to live. Proving you have a place to live needs to happen because the lender fears you will move into the property that you are trying to put a mortgage on. As mentioned before, you need to prove that you have a substantial deposit and a strong credit score to win them over. In addition, a handful of lenders will request proof that you can pay for a few additional landlord-related costs. These would show them that you are prepared for any emergency.
The criteria might look scary. The process might seem tangled, and it might make you feel uneasy, but the bottom line is that the first time buyer buy to let mortgage is possible.
Can You Get a Remortgage with Bad Credit
When you need to secure a new home deal, you may find that it can be difficult, especially if your credit record doesn’t look to be in very good shape. Most of the time, a great batch of people need to renew their mortgages. However, not everyone knows that you can go for a remortgage. Therefore, it is essential to know if you are in this situation that once your term runs out, you can apply for a renewal. Even though trying to get a remortgage with bad credit can prove challenging sometimes, you need to have a little bit of fate in yourself. You can achieve everything if you work hard enough for it.
Lenders may be less willing to offer you any type of mortgage deal if you are trying to get any remortgage with bad credit. Fortunately for you, there are a million and one mortgage brokers ready to take on any mortgage adventure with you. These professionals have access to the whole market, including products that are included for people who are in these situations. That means they can quickly identify a deal that will work best for you.
However, if you are still determined to make it work and want to remortgage with bad credit, seek mortgage advice from an expert. They are more than ready and highly qualified to help, aid, and guide you in these matters, and you are guaranteed to find at least an answer or an option suitable for your situation.