Should I Get an Adverse or a Prime Remortgage?

Sadly today many of us have had problems managing our debts, particularly in this troublesome economic climate. Although having a less than perfect credit history will necessarily have an effect on the lending that is available to you, it does not actually prevent you from getting either a mortgage or remortgage.

Credit History

Adverse credit remortgages are designed specifically for people who've had problems with credit in the past, whether it's a poor credit rating or CCJs. The reality is that if you have had credit problems before, you will likely not be offered the best deals available, for example prime remortgages. On this basis you are likely to find yourself having to pay higher than average interest rates on an adverse remortgage, which may also impose other terms such as minimum periods.

Risk

When you apply for any lending, whether it's a loan, mortgage or remortgage, the lender will take steps to calculate the estimated risk to them of giving you the borrowing. To do this they take into account a number of factors, one of which will almost certainly be your credit history, which they check using the services of a credit reference agency.

If you don't have a great credit record, the lender will naturally consider you to be an increased risk as a borrower, and they will decide which deals they are willing to offer you on the basis of this, more than likely not their prime deals in this case.

Repair

It's not all bad though, as you can indeed get a choice of remortgage deals even if you have had bad credit, and if you manage to keep up with the payments for your remortgage, you can start working towards gradually improving your credit rating over time.

It goes without saying however, that if you've had debt problems in the past, you should make sure as far as possible that you are going to be able to meet the payments for any remortgage you're thinking about, as the last thing you need is to get the wrong deal and end up with your finances in an even worse state than they have been in the past.

Options

Adverse remortgages are available from a variety of lenders these days, many of which you can find out about over the Internet. Make sure you take steps to compare any remortgage deal you're considering, making use of online tools such as comparison and remortgage calculators to best assess how a remortgage will impact on your finances.

Brokers

In some cases, you may find it difficult to find what deals are available to you if you've had bad credit, in which case you may want to consider using the services of a mortgage broker. A broker will have access to the best of the remortgage deals that are on offer, and can also advise you on their relative merits.

Whether or not you end up with an adverse or prime remortgage will depend on your own particular financial situation, but be sure to shop around and get the best deal you can.