| Before the recession bad credit
secured loans and remortgages were very readily available.
In the past even people with bad credit profiles could obtain
remortgages and secured loans at 75% LTV.
Firstly to explain what is meant by equity. Equity is the
difference between the value of a property and the balance
outstanding on the mortgage.
This means that if a property is valued at £300,000,
and the mortgage secured on it is £100,000, the equity
is £200,000.
Remortgages and secured loans at 75% loan to value based
on the above example would mean that 25% of the property value
must be deducted and what remains would leave the maximum
remortgage or secured loan available
.
The maximum remortgage available would therefore be £225,000
and the maximum secured loan would be £100,000 as that
is the maximum secured loan that can be advanced.
Before the recession bad credit rating homeowners could arrange
remortgages and secured loans.
Even those on the verge of repossession could have their
property remortgaged at the last moment just as they were
about to be rendered homeless. The recession was precipitated
in part by lax underwriting.
Now many people think that secured loans and remortgages
are completely unavailable to those with a poor credit rating
when this is indeed not the case.
Bad credit home loans are still out there although at much
stricter criteria and equity margins than in the past.
Unsecured loans for people with a poor credit history are
totally unavailable in these credit crisis hit days and for
tenants who are in need of a loan the painful truth of the
matter is that they are simply not going to be able to obtain
one at all.
For those who own their property there is help available
in the form of bad credit rating loans and remortgages.
For homeowners with a slightly impaired credit rating the
maximum LTV is 60% and this is further restricted to 50% if
the borrower has a very low credit history.
The highest loan value is only 25,000 mark, but this can
nevertheless still be of help to a homeowner struggling to
keep his head above water.
For poor credit rating applicants the interest rate is high
at 25% approximately.
However if the homeowner keeps his nose clean, that is his
financial nose, after obtaining the bad credit loan he can
refinance at a better rate of interest a few years down the
line when his credit file is clean.
Remortgages are still available for bad credit file applicants,
but the equity margin will be at 60% and the interest rate
will be about 10% which is high but much lower than the high
interest credit cards, personal loans, etc. that can be paid
off with the remortgage.
For those who have financial problems remortgage and secured
loans really can help.
|
