Guest Property Blog: How to get a mortgage with bad credit6th November 2013

Listen to the news every morning or evening and it is likely that you will come across some kind of story about hikes in energy prices and household bills or inflation out-stripping wages, causing every day households to feel financial pressures and potentially leading the way to incurring some bad credit.

The theme is finances. They are habitually addressed in the news and largely affect your day to day goings. Consumers understand that it is important to keep on top of their household finances to ensure that they are getting the best possible deal.

Are your heating bills too high? What are the rates on your credit cards? Even so far as to consider how much the monthly shop has increased. Unfortunately the biggest factor is often left unnoticed.

A mortgage is probably the biggest financial commitment you have, yet very few of us consistently look to remortgaging as a way to save money and if you have been unlucky enough to have incurred some credit issues then you may think it is pointless even looking into this area.

However, taking advantage of historically low interest rates could save you hundreds of pounds a month, particularly if you are paying out on a number of expensive debts.

A recent study carried out by the Castle Trust showed that monthly mortgage expenditure accounted for a substantial 30 per cent of the average household expenditure, with some areas like the south east increasing as far as 32.1 per cent.

On average this equates to £557.20 monthly mortgage spending.

Thus around a third of all household expenditure and a hefty chunk which we have to spend each month can make us consider ways to try and get this bill down. It is hugely important to make your mortgage payments each month as your home may be at risk if you cannot maintain them. With the focus on making your mortgage payments, other household finances may begin to suffer, and many have been a victim to missed payments, defaults or worse.

As we start to come out of the other side of the recent recession, the effects of its hardship are becoming more evident.

According to Themoneycharity.org.uk and the debt statistics for October 2013 the average household debt in the UK excluding mortgages was £6,020 in August.

With an average debt of £6,020 to be paid on top of a monthly mortgage commitment for £557.20 it is clear to see the toll that it can take on a cash-strapped household. Unsurprisingly it isn’t too long before many of these families are struggling to make their repayments. Missed payments on credit cards, defaulting on a phone bill, many are commonplace in today’s society. Often through no fault of their own other than a struggle to maintain their existing lifestyles in a depressed economy.

With the recent recession tied heavily to the property market and existing lending, many key change have been made to try and prevent it happening all again.

Prudent measures were put in place to ensure that people couldn’t access finance, who weren’t able to realistically afford it, or had no intention of paying it back. A hard but necessary line to take. Unfortunately coupled with the unhealthy economy and a vast majority of the UK losing out on employment, many people simply couldn’t keep up with their bills, and couldn’t re-finance to ease the stress.

There are still ways to get help, some reputable brokers have weathered the storm and these are the businesses who will be your navigator through the mortgage market when previous high street banks may have said no. But you can remortgage with bad credit, with a number of mortgage lenders who accept people with an adverse credit rating.

With the competitive low remortgage rates floating around the mortgage market at the moment many are assuming that they are reserved solely for customers with a good or fair credit score. This is simply not the case. Remortgage rates are at a historically low rate, looking to remortgage now could save hundred’s of pounds regardless of your credit situation. In particular if you have numerous outstanding debts on a high interest rate, credit cards for example, remortgaging to consolidate these debts could lower your monthly outgoings and help you to restructure your finances so that you ease your cashflow. Please bear in mind you may pay back more interest over the term if you utilise this method, so always study the numbers carefully.

Heading to a mortgage broker can often be a ray of hope for many people. Although we are no longer officially in a recession, the recovery can be just as difficult.

Take action now before your debt situation escalates further or spirals out of control.

A remortgage for people with bad credit can be a vehicle to a cleaner, financially stress free future. First Choice Finance provides free personalised mortgage quotations for people with good, fair and poor credit.