Will a Credit Check Be Done When I Remortgage?

When you apply for a remortgage, what you are doing is essentially taking out a new mortgage on your property. You then use the funds from this new mortgage to pay off the existing one, leaving you with the debt for the new one instead.

Borrowing

Although this is basically changing your mortgage for a property that you already have one on, in many ways it’s treated in a similar way to when you take a new mortgage out in the first place.

Checks

Any lending, particularly the substantial amounts involved in a remortgage, will generally involve credit checks being carried out.

Risk

The lender will want to assess the risk of lending to you, and the main way that they do this is through credit reference agencies, who look into your credit history and check whether you’ve had CCJs for example.

Options

Naturally in extreme cases a lender may not want to offer you a remortgage at all if your credit has been particularly poor, however in most cases it will simply mean that they offer you a less favourable deal, for example one that incurs a higher interest rate. This is because the lender considers you a greater risk if you’ve had debt problems in the past, and is therefore looking to protect their own interests in the deal.

Rates

As well as affecting the likelihood of you getting a remortgage, the credit checks therefore feed into the lender’s decision about what sort of deal they’re willing to offer you. For example, as well as higher rates, they may impose an upper limit on what percentage of the property’s value you can borrow. If you’re remortgaging to obtain funds, perhaps for debt consolidation, this may affect you.

Shop Around

If you do find that you’re not being offered deals that appeal to you, it’s worth having a good look on the Internet. Use remortgage comparison tools to see what the available options are. Look out for lenders who specialise in adverse credit remortgages, which are designed with people who have bad credit in mind. However, make sure you find out everything you can about a lender and be sure they’re reputable before going ahead with anything.

Brokers

Remortgage brokers often have access to remortgage deals that you won’t find looking around yourself. Many of these are from lenders who offer adverse credit remortgages, but who only operate through mortgage brokers and not direct. For this reason, you may find that going through a broker will give you a far better selection of competitive options even if you’ve had debt issues in the past. Having bad debts does not exclude you from a good remortgage, it just makes it a little harder to find one.