Remortgage With Bad Debt, Check It Out If It is For Real


Remortgage with bad debt may just be a solution for some who have been considered a bad credit risk.  Many have had bad times due to the grim economy and so are in need of help.  Don't despair, for thousands have been helped by some good companies.  You just have to look for the right ones.   

Reasons To Remortgage With Bad Debt

First of all, why should one remortgage with bad debt?  Here are some good reasons: 

  • It will reduce the monthly payments by a lot which could save one from hundreds to thousands a year by going to a more competitive interest rate.
  • It will help clear credit problems such as debts and mortgage arrears by using the present value of the house.
  • It will consolidate different loans that will make it more manageable to pay one monthly payment instead of several.
  • It will free the property equity thus raising extra cash to pay for a dream vacation, a new car, a new business or better still save it for a rainy day as an emergency fund so one will not get back to the same financial trouble he is in.
  • It will give one the peace of mind that everybody aspires to have.
Knowing why we need to remortgage with bad debt, let us now deal with how one gets in the position of bad credit. This is essential so we will not get in the same situation again. By this time, you already know or suspect that your credit is far from perfect. But you may not know how this happens. So read on for knowing so will help one not fall into the same trap.

Remortgage With Bad Debt and the Credit Report

Let us therefore check out how the powers-that-be determine our credit worthiness.  They give us a credit rating, this much we know.  The credit rating is a score  that is given to us depending on the reports from our previous creditors.  These are people who gave us a loan or a line of credit in the past. 

If the payments have been on time, then the report is positive which bodes well for the credit rating and it goes up.  Similarly, any missed payments and default which means you did not pay the loan back in full will be reported as a negative which will bring down the credit rating.  This will make you want to apply to remortgage with bad debt.

The lower credit rating will make lenders consider you as a high risk so it will be harder to obtain a loan and other credit offers because they think that you will miss payments or default on your loans.  So they make it harder for you to get a loan by raising the interest rate or only if you have a collateral or a security deposit.

You will have to be careful with your credit report.  If you think there is something wrong with it, ask questions.  Why did I say this?  Because in our experience, we had a discrepancy with this and so we had it investigated and it got corrected right away.  For all you know, this may have happened to you and so you may not even need to remortgage with bad debt.

Just in case you are in the same situation, allow me to show you what happened to us.  We hired a roofing company who gave us an estimate for some work with the stipulation that it will not go over 10%.  He did the work but charged us 25% more over the estimate.  We complained about that and he agreed with a lower payment but still a little over 10%.  But then despite the full payment he received, he reported us to the credit system.

Because we have a good credit rating, the credit company told us that we were given a negative report and sure enough, it was the roofing company.  We explained to them the situation.  The result was that the problem was corrected right away and we got back the good credit rating that we had before. 

So check out if reports that impact your credit are legitimate instead of a result of a vengeance of a company you dealt with.  Once this is out of the way, you will gain back the good credit rating you had before.  Who knows?  You may not even need to remortgage with bad debt?


Now you know the reasons why one may remortgage with bad debt.  Then make sure you don’t get back in the same situation.  How about the impact of remortgage with bad debt on credit worthiness?  It is all featured here, on this web page.

Your Turn

Did you find another reason why it is a good idea to remortgage with bad debt? Please share it with us in the contact form below.

By Roger Guzman, M.D. and Evelyn Guzman

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